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Pairing of OTCs by trade repositories unlikely anytime soon 

August 28, 2014
COO Connect

The bulk of inter-trade repository over-the-counter (OTC) derivatives transactions will not be paired any-time soon, although it will be substantially easier to reconcile exchange traded derivatives (ETDs) as mandated under the European Market Infrastructure Regulation (EMIR).

The challenges facing inter-trade repository pairing are well-documented. A senior executive at the Depository Trust & Clearing Corporation (DTCC) told delegates at the International Derivatives Expo (IDX) in London in June 2014 that it was a challenge to successfully pair inter-repository OTC derivatives and ETD transactions that were reported.

“The matching of OTCs is a continued challenge and will continue to be so. Nobody knows how many of these bilateral transactions there actually are, so it is impossible to know if all of the trades are being reported, which is a problem unlikely to be afforded to ETDs as they are traceable. The on-going saga with issuance of the Unique Trade Identifiers (UTIs) has not helped matters with many financial institutions issuing differing UTIs making it impossible to match derivatives transactions being reported to different trade repositories,” said Tim Reucroft, director at Thomas Murray Investor Data Services.

Read more: COO Connect

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