Traiana swap data repository targets Dodd-Frank, EMIR compliance
Post-trade services company Traiana has opened its Swap Data Repository Service, Harmony TR Connect, for OTC derivatives – providing a tool for market participants to comply with US Dodd-Frank legislation on trade reporting.
Mandatory reporting for the bulk of OTC derivatives contracts is gradually being phased in across both the US and Europe, as regulators seek to impose greater levels of transparency and prevent a rerun of the financial crisis.
Harmony TR Connect is designed to act as a messaging hub for connectivity between participants and trade repositories. It covers functions such as initial trade reporting, unique swap identifier generation, legal entity identifier, trade amendments, cancellations and snapshot reporting. The aim is to make it easier for market participants to report to trade repositories around the world, whether run by the DTCC or other organisations.
“Traiana continues to work with market participants to understand and deliver the solutions required to meet the global regulations,” said Andrew Coyne, chief executive of Traiana. “We are working with the DTCC to deliver standardised and consistent trade reporting on behalf of a broad range of financial institutions operating in global OTC derivatives markets.”
The tool has also been designed to work in Europe when the European Commission’s EMIR legislation takes effect in September this year. Harmony TR Connect will interoperate with Traiana’s Harmony CCP Connect service, which covers the workflow for client clearing including CCP connectivity, trade routing, affirmation, matching, allocation and reporting for centrally cleared OTC FX options and non-deliverable forwards.
The technical standards for EMIR – the European Commission’s new rules mandating the central clearing and reporting of OTC derivatives – came into force on 22 March, meaning that CCPs now have five months to apply for registration. Once that takes place, a 90-day period will follow in which market participants are given notice that they must clear all products covered by the new rules. It is estimated that market participants will be bound by mandatory clearing obligations by Q1 next year.
Interdealer broker ICAP recently raised $36 million through the sale of a 12% stake in Traiana to a consortium of banks – Bank of America Merrill Lynch, Barclays, Citi, Deutsche Bank, JP Morgan, Nomura, and the Royal Bank of Scotland.
The banks also have an option to invest up to $82.5 million by taking a further 20% of the equity. The money will be used to develop the Traiana operation, which provides global banks, broker/dealers, buy side firms and trading platforms with services to automate post-trade processing and risk management of financial transactions in listed and over-the-counter trading markets.