The European Securities and Markets Authority (ESMA) has today announced the registration of DTCC Data Repository (Ireland) PLC as a trade repository governed by the European Market Infrastructure Regulation (EMIR). According to ESMA, which is mandated to supervise trade repositories (TRs), the registration takes effect as from 1 March 2019.
DTCC Data Repository (Ireland) PLC is headquartered in Ireland and will handle derivatives from these classes: credit, commodities, interest rates, equities, and foreign exchange.
According to the DTCC Group, today's registration is driven by its strategy to prepare for a hard Brexit. If a no-deal Brexit happens, its UK subsidiary (DTCC Data Repository PLC - DDRL UK) will abandon its ESMA registration on 30 March 2019, allowing DTCC Data Repository (Ireland) PLC to become the Group TR with operations in the EU 27.
Trade repositories are companies that collect and preserve in a central location the records of trades involving derivatives contracts forwarded to them. Therefore, a registered TR can be utilized by counterparties to derivatives transactions as way of fulfilling their legal obligation to report their trades under EMIR.
A company must demonstrate to ESMA that it can meet all the requirements set out in EMIR, especially those covering these crucial areas:
- Operational reliability
- Safeguarding and recording data; and
- Transparency and data availability.
EMIR's main goal was to increase transparency by establishing standard obligations for central counterparties (CCPs) and trade repositories (TRs) in order to minimize the risks present within the OTC market for derivatives. IT does this by requiring OTC derivatives contracts to be centrally cleared, or by using risk mitigation strategies such as parties exchanging collateral.
EMIR also mandates ESMA to register and supervise TRs as well as to recognize non-EU TRs.