Trade reporting in Brazil

Transcription

1 Trade reporting in Brazil FMIs developments and challenges Simone Miranda Burello Santiago, January 2017

2 Background - TR requirements Sep 2009: G20 Leaders agreed OTC derivatives contracts should be reported to TRs; April 2012: definition of TRs like a new type of FMI A trade repository is an entity that maintains a centralised electronic record (database) of transaction data. Brazil: 1994: mandatory registration of some OTC derivatives transactions in a registration system authorized by the BCB or CVM; 2007: FIs must report OTC derivatives transactions to a registration system authorized by the BCB or CVM; 2009: FIs must report derivatives transactions contracted abroad to a registration system authorized by the BCB or CVM; 2011: OTC derivative transactions must be reported to TR to be considered valid (Law 12,543).

3 Background - TR requirements Brazil: 2013: Law 12,810 defines the activities of TRs and formally gives the BCB and CVM power to issue additional regulation for this type of FMI; 2015: BCB regulates the authorization for the exercise as a TR (Circular 3,743); Scope of mandatory reporting and TR held data has expanded over the years (multiple transaction types; more detailed data): FX spot transactions; Fixed income transactions: interbank deposits and repurchase transactions and time deposit or fixed-income securities issued by FIs; Credit operations (domestic and external loans and debt assignments); Vehicles and real estate used as collateral for auto and property loans.

4 TRs in Brazil BM&FBOVESPA: private entity for derivatives contracts (OTC and exchange traded), FX forward and fixed income (some classes of assets) and equities (CSD); Cetip: private entity for OTC derivatives, FX forward and fixed income (some classes of assets); CIP-C3: private entity for credit operations for specific credit categories, such as payroll and auto loans; Sisbacen Sistema Câmbio: operated by BCB, for FX spot; Selic: operated by BCB, for government bonds (CSD); SCR: operated by BCB, for credit operations and debt assignments;

5 TR data purposes Supervision and oversight of market participants, trading venues and FMIs; Monitoring of financial markets; Monitoring of systemic risks; Others (calibration and impact studies of regulatory policies).

6 Data quality Granular data fields collected for each asset class depends on the use of the data; Framework includes the use of defined standards, terms and governing principles regarding information management; TRs are responsible for ensuring data quality including Confirm accuracy of submitted records; Perform corrections to their own databases; conduct periodic checks on processes to identify areas of improvement. TR verifies if the parameters of the transaction that both counterparties have to report independently matches; BCB performs validation tests on datasets as they are received. Cross-check with the sources outside TRs

7 Other issues Data aggregation: the Brazilian unique fiscal identifier number is used to identify counterparties in the TR data; Direct access by the relevant authorities (BCB and CVM) to datasets; Cooperation between authorities, both through bilateral arrangements and through inter-agency coordination bodies

8 Challenges Domestic and cross-border arrangements for accessing TR data; Data harmonisation: align own set of data standards and taxonomy for data elements used by domestic TRs to international standards; Steps taken in this area: Entities that already have LEI must to include the code as mandatory information in the National Register of Legal Entities (related to the fiscal identifier); BCB considers the LEI as an adjunct identifier for companies operating internationally; Currently in discussion the requirements and cost implications of implementing the LEI system in Brazil

9 Simone Miranda Burello Phone: