Spain’s Trade Repository in Test Mode
July 22, 2010
Spain’s Bolsas y Mercados Espanoles has taken a step forward in establishing a competitive edge against Depository Trust & Clearing Corp. for a new European repository of trade data for over-the-counter derivatives.
On Thursday, BME, the operator of the Spanish derivatives and exchange markets, said that testing has begun with local banks BBVA and Banco Sabadell. The goal of the system, called Regis TR, is to collect and administer details of all OTC transactions reported by users.
BME and its partner Clearstream say internal testing during the past month has gone smoothly with no disruptions. External testing with pilot users BBVA and Banco Sabadell begins on July 22, with other participants lined up.
“The project is running smoothly and has generated a great deal of interest prior to the go-live date,” says Jesús Benito, CEO of Iberclear, BME's subsidiary, in a statement issued on Thursday.
BME and Clearstream have promised an end-of-year go live for Regis-TR. Earlier this month, the DTCC revealed that it will establish a London-based trade reporting repository which will maintain global credit default swap data identical to that held in its New York-based Trade Information Warehouse. By establishing identical CDS data sets on two continents, the DTCC says it will help ensure regulators have secure and unfettered access. Euroclear-owned Xtrakter, a trade matching and reporting service in London, is also talking with its users and others on the development of a trade repository managed in Europe for all asset classes.
The BME’s initiative is in line with the European Commission's forthcoming regulations, which aim to achieve greater operational control and transparency in OTC derivatives. In the first phase, only interest rate derivatives will be available. The next phase of development will encompass a broader scope of OTC derivatives, covering underlying assets such as fixed income, equities, currencies, commodities and others.
It remains to be seen just how “global” the BME’s repository will be. While Clearstream, the Luxembourg-based international securities depository, has plenty of clout among banks and brokers in the European market, many of the world’s largest players in the OTC derivatives space are global firms which have already embraced the DTCC’s TIW.
Regulators on both sides of the Atlantic also are not setting consistent data input and access requirements on the establishment of multiple repositories. So it remains uncertain just how well they will be able to glean systemic risk.
