Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications

Transcription

1 Financial Investment Products Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications Gilnam Nam, Research Fellow* The introduction of trade repositories (TRs) as part of tighter regulations on over-the-counter (OTC) derivatives markets has not been without controversy or difficulty. A TR is supposed to improve transparency and reduce operational risks in OTC derivatives markets. Although Korea already had a derivatives reporting scheme even before the global financial crisis, it does not always provide the latest information and is not as effective as the TR system. Therefore, Korea needs to improve the current reporting systems by adopting the strengths of the TR system. I. Overview The world economy has recently shown signs of recovery from the financial crisis which put the world economy into chaos for the past two years. Given those circumstances, the G20 nations have tried to devise concrete measures to prevent the recurrence of another financial crisis. One of the measures discussed was to tighten regulations on OTC derivatives markets. Financial authorities in the U.S. and EU noticed that transactions in OTC derivatives markets were heavily concentrated in a small number of global financial institutions as the markets grew rapidly during the past decade. They also showed that overconcentration in the OTC derivatives market increased the possibility of systemic risk when Lehman Brothers and AIG went insolvent. Hence, G20 leaders agreed upon measures to strengthen regulations in OTC * All opinions expressed in this paper represent the author s personal views and thus should not be interpreted as the Korea Capital Market Institute s official position. Tel: , namgn@kcmi.re.kr Vol. 1, No. 2

2 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications derivatives markets at the Pittsburgh Summit as follows: All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties 1) by end-2012 at the latest. OTC derivative contracts should be reported to TRs. Non-centrally cleared contracts should be subject to higher capital requirements. We (G20 nations) ask the FSB (Financial Stability Board) and its relevant members to assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse. To sum up the G20 Leaders statement, all OTC derivative transactions should be made through a derivatives exchange or electronic trading platform and be cleared by a CCP clearing house, and transaction information must be reported to a TR. Although the TR is a core part of renewed regulations on international OTC derivatives, its concrete functions and features have still not been clarified. In this article, I will introduce what a TR is and how it functions based on U.S. and EU proposals on OTC derivatives regulations, and explores some major issues regarding the introduction of tightened regulations. Lastly, I will show the differences between Korean OTC derivatives reporting systems and TRs, and draw implications from the comparison. II. Trade Repositories 1. Introduction A. Trade repositories in the U.S. The concept of a TR is primarily explained in the draft bill which strengthens OTC derivatives market regulations in the U.S. and EU. In the U.S., the Obama administration submitted the draft of the Over-the-Counter Derivatives Markets Act of 2009 (referred to as the U.S. Bill hereinafter) to Congress on August 11, The U.S. 1) Unless defined otherwise, the CCP clearing in this article refers to multilateral clearing done by a central counterparty. 23

3 Capital Market PERSPECTIVE Bill defines a TR as an entity that collects and stores objective information on the terms and conditions of OTC derivative contracts. It basically requires an OTC derivative trader to report non-standard contracts which are exempt from CCP clearing to a TR. Under the U.S. Bill, a TR is obligated to disclose overall trading volume and position data in OTC derivatives markets without exposing individual transaction information. Also, it should provide market regulators access to all information including individual transaction information in a secure format. All TRs should register with the supervisory authority for inspection, and the authority will define requirements for the information and operating standards for TRs. B. Trade repositories in the EU As of September 2009, the EU s official position regarding TRs is best represented by two reports: Ensuring Efficient, Safe and Sound Derivatives Markets, published by the European Commission (EC) on July 3, 2009; and Trade Repositories in the European Union, 2) published by the Committee of European Securities Regulators (CESR) on September 29, The EC report defines a TR as an entity that stores transaction information related to all OTC derivatives. 3) In addition, the report stipulated the purpose of a TR as securing transparency of OTC derivatives markets as well as improving the markets operational efficiency. 4) The CESR report provides more in-depth details than the EC report. In the report, a TR is defined as an authoritative electronic database of all open OTC derivative transactions. 5) In addition, only reliable and definitive data that have been checked and confirmed by counterparties can be stored in a TR. The CESR report also noted that contracts maintained in a TR can be considered the sole official legal record (the so-called golden copy ) of a transaction. 2) The CESR report is not finalized. The final draft will be made after receiving comments on the report by November 6, ) They include all OTC derivatives with or without CCP clearing (EC (2009a)). 4) This possibly means improving the efficiency of post-trade procedures. The report also noted that a trade repository could provide additional services such as settlement for the purpose. 5) The information collected in a TR includes data derived from centrally or bilaterally clearable transactions, which in practice cover all OTC derivatives Vol. 1, No. 2

4 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications The CESR report defines the core functionality of a TR as its record keeping and reconciliation which checks for contract inconsistencies. Other than these, a TR also engages in trade life cycle event management, downstream trade processing services such as settlement, novation, affirmation, and portfolio compression related to OTC derivatives. Under the report, market infrastructure and service providers (e.g., OTC derivatives CCPs) that hold a wide range of contract information may function as a TR. The CESR concluded that a TR can help connect contract information from multiple market participants and thereby reduce risks, improve operational efficiency, reduce costs, and ultimately improve flexibility and scalability to respond to technological innovation in OTC derivatives markets. According to the report, TRs, as a primary source of information, provide necessary information or give regulators, market participants, and other service providers access to the information. Regulators can find data related to credit default swaps (CDS) according to: type of product (i.e., single name CDS, untranched indices, tranched indices); underlying asset; type/category of protection buyers/sellers; maturity; currency; top single names by gross and net notional; top indices and tranches by gross and net notional; product data by sector; position data by counterparty; and position data (gross and notional) for the main counterparties. C. Comparison between U.S. and the EU trade repositories TRs in both continents are similar in the sense that they are designed to improve market transparency and mitigate operational risks. The U.S. and EU designate a TR as a core market infrastructure because information from a TR helps regulators detect risk factors and disclose information to improve market transparency. There are two main differences between TRs in the U.S. and EU. First, unlike the EU standard which requires market participants to report all data to a TR, the U.S. Bill limits the reporting duty to non-standard OTC derivatives which are exempt from clearing. 6) Second, the EU 6) The G20 Leaders Statement did not clearly state whether OTC derivatives to be reported to a TR need to be cleared or not. 25

5 Capital Market PERSPECTIVE draft clearly states that contract information in a TR has to be confirmed and verified by counterparties. These differences between the U.S. and EU may largely affect the TR functions as well as the role distinction among OTC derivatives CCPs. This is why it becomes important to keep a close watch on the remaining legislation process. 2. DTCC Deriv/SERV The closest thing to a TR that the G20 nations and the EU attempted to introduce is the Trade Information Warehouse (TIW) which Deriv/SERV in the U.S. Depository Trust & Clearing Corporations (DTCC) 7) has provided for CDS since November The DTCC TIW consists of two parts: a database which holds contract information, and a central technology infrastructure which processes various services. The contract information built on the database includes two types: gold records which have been legally confirmed, and bronze records which hold basic economic information but have not been legally confirmed or have not met the gold records requirements. The gold records here are the most up-to-date contract information for trades that have been processed by the automated legal confirmation. 8) DTCC TIW users can use web-based graphical user interfaces (GUI), pre-defined spreadsheet uploads, or the financial product markup language (FpML, a standardized messaging system) to deliver information to DTCC TIW. Then, based on the contract information accumulated in the database, DTCC TIW provides technical services such as reconciliation and credit event processing over the life of a contract. 7) DTCC is a U.S. firm which provides automated trades and standardization services. Depository Trust Company (DTC), National Securities Clearing Corporation (NSCC), Fixed Income Clearing Corporation (FICC), DTCC Deriv/SERV LLC, DTCC Solutions LLC, and EuroCCP, Ltd. are subsidiaries of DTCC. Among them, DTCC Deriv/SERV provides specialized services for post-trade processes for OTC derivatives. 8) In order to complete an OTC derivative transaction, counterparties must go through a long and manually intensive process to exchange a signed confirmation form. The automated legal confirmation service such as Matching and Confirmation provided by DTCC Deriv/SERV could address the problem Vol. 1, No. 2

6 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications Figure 1. Deriv/SERV trade information warehouse Source: DTCC The DTCC TIW system is considered effective because it concentrates comprehensive OTC derivatives data in a single institution, and thereby enhances the efficiency of repetitive tasks such as reconciliation and settlement 9) and substantially reduces operational errors. The biggest outcome of the system, however, is that it cuts the credit event processing time and helps assess the exact size of settlement. According to DTCC s report (Maria, Collazo, 2009), seven credit events occurred from 2005 to 2006 before DTCC TIW launched its service, and it took 10 days to complete the whole process of each credit event from an auction which determines the recovery rate of the reference entity to the actual settlement. However, the period is reduced to less than 5 days for more than 20 credit events that occurred after September ) The partnership with CLS Bank enables DTCC to settle the contracts held by the TIW. 27

7 Capital Market PERSPECTIVE Table 1. Major credit events during the financial crisis Reference Entity Transaction Type Settlement Contractual Amount 1) (USD Equiv) Net Settled Amount (USD Equiv) Fannie Mae, Freddie Mac, Tembec Lehman Bros. Inc. Washington Mutual Landsbanki, Glitnir, Kaupping Tribune Company Republic of Ecuador Lyondell Chemical, Millennium America, Equistar Chemicals Single Name and Index Single Name Only Single Name Only Single Name Only Single Name, Index Single Name, Index Single Name, Index 15-Oct-08 $996b $429m 21-Oct-08 $72b $5.2b 7-Nov-08 $41b $1.4b 20-Nov-08 $71b 4,365b 16-Jan-09 $24.9b $2.65b 23-Jan-09 $2.6b $300m 10-Feb-09 $7.8b $448m Note: 1) The amounts in the table are contractual amounts of single-name CDS. Source: DTCC In addition, when Lehman Brothers bankruptcy filing on September 15, 2008 amplified market uncertainty, the market went into chaos with groundless speculations that the Lehman Brothers case would risk USD 400 billion worth of CDS. However, the DTCC TIW computed and announced that the actual contractual amount was only USD 72 billion and the net settled amount was at USD 5.2 billion (Thompson, 2009). The information transparency of the CDS market has improved remarkably ever since the DTCC TIW began to disclose actual CDS market data by state in October ) 10) The disclosed information includes data regarding the gross amount outstanding by customer (by dealer/ non-dealer, by product, by seller/buyer), reference entities of single name CDS seller/buyer, buyer/seller of on the run/off the run indices and tranches, gross and net outstanding amount of top 1,000 reference entities, gross and net outstanding amount of all indices and tranches, gross amount of single name CDS by maturity, and weekly updates on all the information described here as well as weekly transaction information (new transactions, maturity, novation) Vol. 1, No. 2

8 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications III. International Discussions on Introducing TRs As nations around the world announce their plans to introduce TRs, markets are also showing voluntary movement to initiate the TR system. For example, 27 major financial institutions in the U.S. 11) stated in a letter to the governor of the Federal Reserve Bank of New York on June 2, 2009 that the transaction information of all CDS, interest rate derivatives, and equity derivatives that are currently not centrally cleared would be transferred to the TIW by July 17, 2009, December 31, 2009, and July 31, 2010 respectively. Also, there is a movement to establish a TR for interest rate derivatives and equity derivatives in order to keep the transfer schedule. It is widely known that the International Swaps and Derivatives Association (ISDA) selected TriOptima, a Sweden-based post-trade service provider as a TR for interest rate derivatives, and is now working on selecting a TR for equity derivatives. Despite aggressive efforts made by both the financial authorities and markets, there are still some disputes about the establishment of TRs. The first argument is regarding whether to establish a single, integrated TR, or create multiple regional TRs. The debate has been heated because the EU, which does not have a TR within the area, insists on establishing a separate TR for the EU, just like the DTCC TIW serves the U.S. The logical ground of a single, integrated TR is found in two ideas: first, an integrated TR will deliver economies of scale, and second, multiple, regional TRs may bring about market fragmentation and inefficiency. The multiple TR system may confuse market participants. For example, if a CDS transaction occurs between a U.S. firm and an EU firm, where should it be reported? If that transaction is reported to both TRs, the transaction will be counted twice and thus ruin the data. Otherwise, the transaction information will be missing in one of the TRs. In either case, regulators will not be able to have an integrated view of the market. Unlike the U.S., the EU financial authorities favor the idea of multiple TRs. They insist that each region have its own TR, especially within Europe, to ensure integrity and legal protection. The reason behind this is that the EU financial authorities have long doubted 11) They consist of major broker-dealers, buy-side companies, and other major trade associations. 29

9 Capital Market PERSPECTIVE if they will be able to easily access information in a TR established outside Europe. The next argument is about how TRs and OTC derivatives CCPs divide their roles. The U.S. Bill limits the range of OTC derivatives to be reported to a TR to non-standard OTC derivatives that cannot be cleared. In this case, a TR would perform a secondary role to a CCP, collecting and storing non-standard OTC derivatives data. Against this argument, the DTCC points out that such a system will decentralize information and thereby make supervisory actions ineffective. The DTCC explains that different data formats and standards between multiple OTC derivative CCPs and TRs would undermine the efficiency and timely and representative data integration in the CDS market. An alternative suggested by the DTCC is to report all OTC derivatives to TRs, regardless of whether they are clearable or not. This, according to the DTCC, will enable regulators and markets to receive stable and integrated information from TRs. Concerns about data privacy could be another issue. A leakage of private information included in transaction history may inflict huge damages on the trader, confuse the markets, and lead to serious problems. Therefore, TRs should devise detailed measures to keep their information secure. The last issue is how to promote the use of TRs. Financial authorities should decide whether to mandate the use of TRs or to provide incentives to use TRs. While the U.S. Bill mandates the use of TRs, the EU is yet to decide on this. IV. Korean OTC Derivatives Reporting Systems The Korean OTC derivatives market is only a fraction of that in the U.S. or EU. However, unlike the U.S. and EU where no reporting scheme is in place, Korea has a reporting scheme that enables financial authorities to monitor information regarding OTC derivatives. Currently, there are two reporting schemes for Korean OTC derivatives markets. One is the Derivatives Report based on the Financial Investment Services and Capital Market Act (FSCMA), and the other is the FX Reporting System built based on the Foreign Exchange Transactions Act Vol. 1, No. 2

10 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications 1. Derivatives report Financial investment firms in Korea should submit a business report to the Financial Services Commission as defined in Article 33 of the Financial Investment Services and Capital Market Act and Article 36 of the Act s Enforcement Decree. According to the Act, 74 financial institutions file derivatives report as of January ) Financial firms that received an OTC derivatives dealing license should file a monthly report, while other financial institutions without a license are obligated to report quarterly (refer to Table 2). Category Derivatives transactions OTC derivatives transactions Derivatives transactions (including securitized derivatives) Outstanding balance by underlying asset Other particulars Table 2. Contents included in a derivatives report Contents Interest rate, currency, equity, credit, precious metal, other metal, agriculture, fishery and livestock products, energy, and others Firms with the OTC derivatives license Quarterly Reporting Period Firms without the OTC derivatives license Quarterly Credit exposure from OTC transactions Monthly Quarterly Stress tests for OTC transactions Outstanding amount for credit derivatives, credit events and other conditions to terminate contracts, details on customized derivatives transactions Quarterly Monthly Quarterly Outstanding amount / redeemed / maturity of securitized derivatives, details Monthly on the brokerage of OTC derivatives Outstanding amount of derivatives by reference entity Monthly Quarterly Outstanding amount by interest rate/ currency product, currency maturity, outstanding amount by underlying asset of Monthly securitized derivatives Profit / loss from businesses related to derivatives Quarterly Quarterly Balance sheet items related to derivatives Monthly Quarterly Type of OTC derivatives investors (sophisticated / retail) Quarterly Source: Financial Supervisory Service 12) This includes 12 national banks, 6 local banks, 29 branches of foreign banks, 18 domestic securities firms, and 9 foreign securities firms. 31

11 Capital Market PERSPECTIVE Currently, the Derivatives Report includes the following contents: derivatives transactions, OTC derivatives transactions, credit derivatives and customized derivatives transactions, securitized derivatives transactions, outstanding amount by product and by underlying asset, and other particulars. One thing noticeable here is the requirement to report their credit exposure and results of stress tests. The strengthened monitoring function of the report enables market participants to better understand details on reference entities of credit derivatives as well as the outstanding amount of each interest rate and currency derivative. The Derivatives Report is different from other supervisory tools which generally require financial firms to submit raw data, which are difficult to manage and analyze. The Derivatives Report requires each financial institution to process predetermined analyzing criteria (outstanding balance by product and maturity, stress conditions, credit exposure, and others) and report the result. This remarkably reduces the burden on regulators. 2. Reporting scheme for derivatives in the FX reporting system The FX Reporting System was first established in April 1999 under Article 25 of the Foreign Exchange Transactions Act and Article 39 of the Act s Enforcement Decree. The system enables a FX information concentration agency, which relays, concentrates, exchanges, or analyzes information concerning foreign exchange transactions and payment and receipt, to collect FX-related information. The FX Reporting System includes: an FX information concentration agency, FX information reporting agencies, FX information intermediaries, and FX information users. First, the FX information concentration agency is the Bank of Korea (BOK), which operates the FX Reporting System under Article 4 of the Regulations on the Administration of a Foreign Exchange Information Concentration Agency, included in the directives of the Ministry of Strategy and Finance. As of August 2009, FX information reporting agencies consist of 380 financial institutions including banks, Vol. 1, No. 2

12 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications securities firms, asset management companies, future companies, and insurers that are under obligation to report FX-related information (including derivatives-related information) to the concentration agency (BOK). Almost all financial institutions which engage in OTC derivatives businesses are included in this category. Table 3. Participants to the FX reporting system Reporting Agencies Direct Indirect Institutions No. of Institutions Domestic banks 18 Branches of foreign banks 37 Merchant banks 4 Future companies 12 FX brokerages 8 Others 1) 19 Asset management companies 53 Life insurers 21 Non-life insurers 28 Securities firms 54 Korea Exchange 1 Credit specialized financial companies 32 Local agricultural cooperative federations 94 - Relay Agencies Korea Securities Depository Life Insurance Association General Insurance Association of Korea KOSCOM Credit Finance Association National Agricultural Cooperative Federation Users BOK, Ministry of Strategy and Finance, National Tax Service, Korea Customs Service, Financial Supervisory Service, Korea Financial Intelligence Unit, Korea Deposit Insurance Corporation, Korea Center for International Finance 8 - TOTAL 388 2) Note: 1) 6 Intermediaries, 3 securities firms, 1 life insurer, 6 credit specialized financial companies, KOSCOM, Korea Financial Telecommunications and Clearings Institute, Ministry of Knowledge Economy (Korea Post) 2) The National Agricultural Cooperative Federation is included in domestic banks as well as intermediaries. Source: Bank of Korea 33

13 Capital Market PERSPECTIVE Some FX information reporting agencies are not directly connected to the FX Reporting System. Their transaction data are reported to the head of the concentration agency through six FX intermediaries. For example, asset management companies report through the Korea Securities Depository. In addition, the Life Insurance Association and the General Insurance Association of Korea act as an FX intermediary for life insurers and non-life insurers. Other than these, KOSCOM, the Credit Finance Association, and the National Agricultural Cooperative Federation are intermediaries for securities firms, credit specialized financial companies, and local agricultural cooperative federations respectively. FX information users comprise of eight institutions including the BOK, the Financial Supervisory Service, and the Ministry of Strategy and Finance, which are allowed to use the data collected via the FX Reporting System for analysis and oversight. The FX Reporting System uses a host-to-host connection between the FX Reporting System server and the FX server at each domestic bank which directly reports to the concentration agency. Foreign bank branches use terminals to access the FX Reporting System. Agencies which indirectly report to the concentration agency use their PCs or server to access each intermediary that is connected to the FX Reporting System server through a leased line. The data reported through the FX Reporting System cover nearly all OTC derivatives including currency derivatives (forward exchanges, FX swaps, etc.), interest rate derivatives, equity derivatives, commodity derivatives, credit derivatives, securitized derivatives, and other customized derivatives. The data should include every detail (economic variables) on each contract, and be reported daily. However, the data related to securitized, customized, and credit derivatives can be reported monthly. Compared to the Derivatives Report, the FX Reporting System covers broader, comprehensive reporting agencies, products, and data and uses more appropriate reporting cycles by securing source data for each contract Vol. 1, No. 2

14 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications 3. Differences between Korean OTC derivatives reporting systems and TRs Compared to the U.S. and EU where there are no reporting systems, the Korean reporting scheme for OTC derivatives is more advanced. However, the Korean system is different in many aspects from the TR system being discussed in the U.S. and EU. In fact, the TR system means much more than just simply building a reporting scheme. First of all, the two systems differ in whether or not to secure individual transaction information. TRs suggested in the U.S. and EU are designed to store individual transaction information itself rather than summaries. On the other hand, the Korean Derivatives Report includes only summaries or processed information with some exceptions for a few products. However, the FX Reporting System is somewhat close to TRs because it requires reporting of individual transaction information. The second difference is regarding the verification of collected information. While the U.S. Bill does not clearly mention how to verify the information stored in TRs, the EU report and the TIW specify that TRs must store definitive data which have been verified by both parties of a contract. A prerequisite to this requirement would be an automated confirmation of transaction information. However, the information in the Korean Derivatives Report and FX Reporting System does not go through the automated confirmation process. Manual verifications are conducted only for questionable data. Third, the two systems are different in providing information in a timely manner. TRs should be able to provide information to financial authorities at an appropriate time. However, the Derivatives Report is not capable of doing so because it is updated monthly or quarterly. The FX Reporting System collects information on a daily basis and thus provides up to date information necessary for financial authorities to monitor markets. There are some exceptions e.g., it still lags behind in processing the data source. Lastly, the two systems adopt different strategies to reduce operational risks. TRs in the U.S. and EU attempt to alleviate operational risks by adopting straightthrough processing (STP) for back office tasks in financial institutions. Basically, TRs 35

15 Capital Market PERSPECTIVE are supposed to serve public interest by providing necessary information to markets and financial authorities, as well as return benefits to financial firms that submitted the original information. 13) However, under the Korean derivatives reporting system, the original information providers create data only for the purpose of reporting, and they have no incentive to improve the accuracy of data and to speed up their reporting process. The dual reporting system, which consists of the Derivatives Report and FX Reporting System, increases the burden of reporting rather than providing benefits to financial firms. V. Implications: How to Improve Korean OTC Derivatives Reporting Systems Now is a good time for Korea financial authorities and market participants to respond to the introduction of TRs which was agreed upon at the Pittsburgh Summit. The global community has been fully engaged in establishing a TR for each asset class and region, and this has spurred discussion about how major financial supervisory authorities coordinate their oversight over TRs. 14) Despite the global discussions under way, Korea has not made any progress on TRs relative to progress made on CCP clearing for OTC derivatives. This may be because not much about TRs is known in Korea. The other explanation may be that Korea has already established its own derivatives reporting methods: the Derivatives Report and FX Reporting System. It is true that Korean derivatives reporting systems are ahead of the U.S. and EU. The FX Reporting System has secured more data than TRs require, and the Derivatives Report has been successful as an information system that can be used to monitor market risks. However, in order to improve market transparency and reduce operational risks, a TR should be able to secure definitive source information and provide supervisory information and market disclosures in a timely manner through the STP for post-trade 13) This may incur additional service charges. 14) International organizations and 15 nations established the International OTC Regulators Forum in their attempt to discuss how to coordinate their supervisory efforts Vol. 1, No. 2

16 Trade Repositories and Korean OTC Derivatives Reporting Systems: Comparison and Implications processes. Korean derivatives reporting systems do not support the automated reporting process and thus cannot provide timely and effective information. Furthermore, its reporting process is separated from back office tasks, which increases the cost burden for original information providers. Therefore, Korea needs to come up with measures to advance its derivatives reporting scheme while nurturing the strengths of the TR system. Korea already has a centralized network Korea needs to come in its reporting systems with all OTC derivatives up with measures to advance its derivatives trading financial institutions. If progress is made in reporting systems while standardizing and automating post-trade processes, nurturing the strengths and improvements can be integrated in the existing of the TR system. derivatives reporting network, Korea will be able to build advanced derivatives reporting systems that deliver the same effect as TRs in the near future. 37

17 Capital Market PERSPECTIVE References Acharya, V., Richardson, M., 2009, Restoring financial stability, Wiley Finance. Cecchetti, S.G., Gyntelberg, J., Holladers, M., 2009, Central counterparties for over-thecounter derivatives, BIS Quarterly Review 2009 Sep. CESR, 2009, Trade Repositories in the European Union, CESR/09-837, consultation paper. DTCC Deriv/SERV, 2007, Trade Information Warehouse-A Practical Guide for Customers. EC, 2009a, Ensuring efficient, safe and sound derivatives markets, Communication from the Commission. EC, 2009b, Ensuring efficient, safe and sound derivatives markets, Commission Staff working paper. ECB, 2009, Credit default swap and counterparty risk. FSA, 2009, The Turner review: a regulatory response to the global banking crisis. Maria F.D., Collazo, M., DTCC s Trade Information Warehouse Streamlines Payouts on Multiple Credit Events, Alternative Investment News, 2009 (March 9). Study Group on Post-Trade Processing of OTC Derivatives Trades, 2009, Report on improvements of post-trade processing of OTC derivatives trades in Japan. Thompson, L.E., 2009, Testimony before the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, the United States House of representatives Vol. 1, No. 2