REGIS-TR the first European Trade Repository for Derivatives. Powered by:

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1 the first European Trade Repository for Derivatives Powered by:

2 Agenda 1. Introduction to the regulatory environment 2. - the services and benefits it proposes 2

3 Reporting obligation All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end 2012 at the latest. OTC derivative contracts should be reported to trade repositories. G20 declaration- Pittsburg, 25 September

4 Trade Repository Map worldwide Status Fall 2012 One Global TR Solution likely and desirable? Local TR? Local TR? Local TR? Local TR Local TR Local TR? Local TR Local TR Local TR Local TR? Local TR? 4

5 Further considerations: Reporting obligation outside Europe Host European SD vs. American SD European SD vs. American non SD European non SD vs. American SD European non MSP vs. American MSP European non SD/MSP vs. American non SD/MSP European MSP vs. American non SD/MSP Reporting counterparty American SD European SD American SD American MSP American non SD/MSP European MSP Participants reporting obligation (Order of responsibility) 1.- Swap Dealers 2.- Major Swap Participants 3.- Non SD nor MSP European entities trading in US markets that have not an obligation to register as SD or MSP have no reporting obligation in the US 5

6 EMIR Market Participant Categories EMIR Counterparty Categories Financial Counterparty Banks, Insurances, investment firms, UCITS, pension funds, AIFs FC Systemically important Non- Financial Counterparty entering into non-hedging activities in derivatives above the clearing threshold NFC+ Not systemically important Non- Financial Counterparty entering into derivatives positions for hedging activities only NFC- Third Country (non-eu) Entity 3 rd CE All counterparty types, except for 3 rd CEs need to report all their derivatives trades 6

7 EMIR Key Cornerstones of the EU Regulation ESMA Final Report Key components of the reporting regulation: Reporting: Financial as well as non-financial counterparties must report all, cleared as well as uncleared, exchange- as well as OTC-traded contracts to a TR no threshold applies no exceptions on derivatives products Reporting: 59 data fields in total. Basic trade information comprised in two tables (counterparty data and common data). Reporting of exposures: Only financial and relevant non-financial (above the clearing threshold) are obliged to report daily M2M valuations and collateral values Timing: All derivatives positions must be reported to a trade repository (limit T+1) Live contracts are to be backloaded Reporting start date: phase-in per asset class (see next slide) Extensions: backloading (90 days for outstanding at time of reporting date and 3 years if not outstanding) and exposures (180 days) after the respective reporting start dates 7

8 EMIR Timeline and implementation schedule G20 in Pittsburgh EU proposal of EMIR EMIR adopted by EU Parliament Publication of EMIR EMIR enters into force Final Report on Technical Standards for EMIR provided by ESMA Europ. Commission approves Final Report of ESMA Reporting obligation to TRs (Interest Rates and Credit Default) Reporting obligation to TRs (FX, Equities and Commodities) >> >> Legislation >>>> Implementation >>>>> Sept July Sept March July Aug Sep Dec 2012! Sep Jan 2013 Dodd Frank Reform & Costumer Protection Act signed CRD IV MiFIR REMIT 8

9 Who takes care of reporting? Role of different parties in the definition of the reporting flow DFA: Clear role of platforms, markets, CCPs and sell side. Realtime reporting obligations over primary details EMIR: Flexible approach. Industry players will define market practice for reporting. T+1 reporting deadline In Europe, reporting can be carried out: Directly and separately by the parties Outsourced to the counterparty Outsourced to the different platforms that intervene in the trading/posttrading flow (exchanges, confirmation platforms, vendors, CCPs) Depending on the post-trading flow, several 3rd party agents might intervene 9

10 Reporting Flows Supervisory Authorities Trading platforms Post-trading platforms Third Party delegation PDF Directly? CCPs Information enhancement Market Participants Clients Reporting Obligation 10

11 Lifecycle (t to t+n) Each change that is subject to reporting has to be reported individually, not accumulated (Lifecycleview) Reporting requirements and reporting procedure under EMIR IRS Trade New 1 Modification 2 Possible forms of reporting to 1) For the content of the reporting message: Delta -Reporting single report of an action or the change of a content field, beginning after new trade opening ( 1 ) until termination ( 4 ) Recurring reporting of the whole trade (Snapshot in this case 4x) by flagging each type of action ( 1 to 4 ) approach possible for the entire portfolio Valuation Update Cancel /Termination 3 4 2) For the frequency of reports (interchangeable): Ad-hoc (real-time) Batch (frequency driven by the delivering system) Accumulated at end of day In a single file In several files Fully ESMA-compliant test environment rolled out November 13 th, including complete technical/functional documentation and XML-scheme for filling in the interface available to all interested parties 11

12 Agenda 1. Introduction to the regulatory environment 2. and the services and benefits it proposes 12

13 What can be for the industry What is and who is behind What brings to the industry Interest rates and fixedincome Credit default swaps Reporting of all asset classes by end of 2012 Equities Commodities Foreign exchange Exchange Trades Derivs A Trade Repository offering registration and reporting services for Derivatives out of Luxembourg Belonging to well known European Market Infrastructures within two exchange infrastructures Registration and reporting services for Derivatives and holding the customer data exclusively in the EU Providing a one-stop-shop service, based on a reliable, cost-efficient TR solution for all types of market participants Delivering added-value services well beyond regulatory compliance matching, exposure management, third-country domestic solutions 13

14 is based on a secure and scalable system environment Technical architecture: Developed on BME s mainframe IBM platform with a central database server using DB2 Efficiency, high security and scalability Contingency measures: Use of existing BME s mainframe also used for CSD function: Maximum back-up quality standards Availability of two redundant locations with data centres and offices, with synchronous data replication: Integrity of back-up data Internet access = BME Internet infrastructure with high capacity bandwidth and complete redundancy: connection with two different ISPs through two independent nodes. All components duplicated Tested every 6 months 14

15 offers flexible and industry-standard access System Access and communication between participants and : Use of web-based application Manual input/queries with secured Internet access. Web access, exportable to CSV files Mass upload/download of XML files through secured Internet access Automatic transfer of XML files through a SWIFTNet FileAct file transfer connection between and the participant SOAP API connection and data transfer via SWIFT MT messaging under development Customer Service helpdesk during EU working hours Advantages: Cost-efficient platform, accessible from anywhere Efficient/cost-effective particularly for small participants Efficient for medium- to large participants Use of low-cost widely used industry standards Alternative connection possibilities, further flexibilizing the options for participants Online helpdesk support Easy build-up of XML messaging that is widely used across financial and non-financial counterparts. 15

16 Access for market authorities Access based on the ESMA technical standards Access granted in accordance with regulatory demand, be it international or domestic will record information regarding the access to data given to the entities listed under EMIR, including the scope of data accessed and a reference to the legal provisions granting access to such data, as ESMA technical standards indicate XML reporting provided by push to respective supervisory authority Web based access with supervisor profile defined for each supervisory authority providing: Immediate full view of relevant entities positions exportable to CSV files Pre-defined queries exportable to CSV files Aggregated market dissemination on regular based (weekly statistics) Archiving of information: 10 years after termination of contracts Can be increased if required 16

17 Rolled-out and planned developments Ongoing developments: Roll-out of Final Report-compliant permanent test environment (Nov 2012) Connectivity to different CCPs, starting with Eurex Clearing Capturing of trade details of OTC- as well as Exchange-traded and cleared derivatives directly from the clearing-house Connectivity to SWIFT Capturing of trade details of OTC derivatives transactions confirmed via SWIFT MT messages directly out of the SWIFT system Value-added Services for 2013 Reporting Hub: to perform central reporting hub services for future trade reporting necessities of the industry in the framework of e.g. MiFiD, REMIT, CRD IV Exposure Management: Existing international or domestic collateral pools for collateralisation of exposures in OTC derivatives (Clearstream Cmax) 17

18 Why? Product offering: Commercial offer: Close contact with ESMA First ESMA-compliant test environment launched in Nov Free access A complete technical documentation available. Mapping works can be started already. Reporting can be made easily via XML files Automation of connectivity: SWIFTNet and Web services SOAP API Connectivity to Eurex Clearing and Meff A number of software providers partnering: B+S, C24, Cinovo, CAD IT Reporting Hub: central reporting hub services e.g. MiFiD, REMIT, CRD IV Exposure Management: connection with Clearstream Collateral management system One-stop-shop in the EU Clearstream sales force coverage & technical help-desk to assist your IT team Flexible participation profiles, allowing any entity to participate directly or delegate to a third party or play both roles if necessary Legal agreements already available Flexible fee schedule with caps and discounts (free Backloading before reporting start date) 18

19 Contact Details 42, Avenue J.F. Kennedy L Luxembourg Tel: onboarding@regis-tr.com 19