REGIS-TR the European Trade Repository for Derivatives. 10./11. May 2012 Clearstream CEE Conference

Transcription

1 the European Trade Repository for Derivatives 10./11. Clearstream CEE Conference

2 Agenda 1. Trade Repository Offering 2. Regulation in the making Status Europe 3. Regulation driving structural changes in the industry 2

3 What can be for European market participants One-size fits all is not what market participants are seeking for Who is and is behind : Trade Repository offering registration and reporting services for (OTC) Derivatives out of Luxembourg Two well known European Market Infrastructures belonging to two exchange infrastructures providing the service Delivering added-value services well beyond regulatory compliance matching, exposure management, third-country domestic solutions What additionally brings to the industry: A trustworthy partner, focussed and fully committed to the delivery of a reliable, costefficient TR solution for the industry Interlinking with CCPs, Vendors and other trade data sources A service provider crafting a service for (OTC) derivatives market in different jurisdictions 3

4 ready to cover all product classes in the course of 2012 Registration Full Registry Stamp Informative Stamp Interest rates and fixedincome Administration Communication Matching Affirmation Reconciliation Credit default swaps Any market Any asset class Equities Consolidation Commodities Foreign exchange Reporting Regulators Participants Bespoke products Markets 4

5 Agenda 1. Trade Repository Offering 2. Regulation in the making European Perspective 3. Regulation driving structural changes in the industry 5

6 OTC Derivatives Regulation - EMIR: Desire to change the structure of the derivatives market integrity Status Quo Trading on organised markets Blueprint Trading on organised markets Goal seems realistic and on a good track OTC trading using a CCP Collateralised OTC trading OTC trading using CCPs Uncollateralised OTC trading Collateralised (preferably 3 rd party) OTC trading Registration of trades 6

7 EMIR Key Cornerstones of the EU Regulation Comparison draft vs. agreed regulation Feb Proposed European Regulation Key components of the regulation aree: The risk mitigation goals impact financial and non-financial (i.e. corporate) market participants Clearing: Clearing to be mandatory also for non-financial market participants beyond a certain activity threshold Reporting: non-standardised, non-clearable contracts All, cleared as well as uncleared contracts are to be electronically confirmed with an auditable monitoring process for all participants no threshold applies Timing: A reporting obligation for OTC all derivatives positions no later than trade date plus 1 to a trade repository Live contracts are to be backloaded into trade repositories before regulation materialises ESMA to define the technical standards for reporting by June October 2012 The new regulation to apply from 1. Jan 2013 Confirmed 7

8 Agenda 1. Trade Repository Offering 2. Regulation in the making European Perspective 3. Regulation driving structural changes in the industry 8

9 Growing connectivity, communication and reporting complexity Levels of involved parties Information flows Regulatory requirements Global institutions Regulators/ authorities ESMA e.g. IOSCO, IMF, BIS Third country authority ESMA collects data via TRs and CCPs ESMA to define standards with TRs/CCPs and market participants ESMA coordinates with third country authorities exchange of data or reports to an international institution Function of trade repository Trade repository A CCP N Trade repository B CCP M All TRs and CCPs active in EU/Eurozone need to be registered with ESMA Market participants / User of OTC derivatives Market participant A Execution Venue 1 Trades Execution Venue 2 Market participant B Execution Venue 3 Market participant C Execution Venue 1 Trades Market participant D Execution Venue 5 Execution Venue 6 Mandatory reporting trades of market participants with legal HQ in the EU/Eurozone All market participants report details (e.g. volume, name of counterparty) of derivatives trades to TRs or CCPs via an identification/reference number concept 9

10 Connectivity Environment Implementation of global (OTC) Derivative Regulation SWAP USERS/TRADERS Hundreds of new electronic connections between dealers and clients SWAP USERS/TRADERS Connection to between execution facilities Over 15 CCPS looking to capture (OTC) derivatives Between 3 and max. 6 TRs will exist globally SWAP EXEC FACILITY CLEARING HOUSE TRADE REPOSITORY Key issues for the market participants: Short-notice project initiation and resourcing (budget and adequately experienced HR resources (business as well as IT staff)) Selection of provider(s) of choice based on: Service scope, reliability, legal environment, costs etc. Source: Own research, TABB Group Research

11 Time-to-regulation and decision complexity cause headaches Issues to be responded to Direct vs. indirect interaction with Trading Venues, Clearing Houses and Trade Repositories One partner vs. divers network (multiple Venues, CCPs and TRs) Service Scope of provider - flexible offering, scope of products covered, value-added services Project launch and project budget result in Increasing need for cooperation and sourcing of services on different levels due to the complexity of the new derivatives environment and amount of add. mandatory projects in the industry: Collateral Management Services Inhouse-IT Infrastructure Mandatory Clearing Mandatory Reporting 11

12 cooperates with industry infrastructures and market specialists to reduce the direct trade reporting need for the industry Reporting vehicles for cleared ET and OTC derivatives Vendors CCPs Other Providers Only a small remaining proportionof the customer s activity needs to be reported directly ED and OTC Derivative Users 12

13 Contact Details 42, Avenue J.F. Kennedy L Luxembourg Tel: tderenbach@regis-tr.com 13