In June 2011, DTCC, through its subsidiary Deriv/SERV LLC, and EFETnet announced that the two low-cost, industry leaders were collaborating with market participants in the commodities industry to establish a global commodity derivatives trade repository.

The new repository, which is domiciled in Europe and will be governed by industry board members, follows DTCC and EFETnet being selected by the International Swaps and Derivatives Association’s (ISDA®) Commodities Steering Committee to aid in the development of a repository to meet global regulatory reporting requirements. The service integrates EFETnet’s expertise in the commodities arena and its deep network of contacts in the user community with DTCC’s proven track record in building global trade repositories.

Overview

DTCC will provide global repository services for the Commodity (together with EFETnet), FX (together with SWIFT), equity, credit, and interest rate derivative asset classes. The repository will support Dodd-Frank reporting and will also allow for complying with future global regulatory initiatives as well.

Each of the asset classes will roll up into a Global Trade Repository providing regulators and the industry alike a clearer and more complete snapshot of the market’s overall risk exposure.

The repository accepts transaction data for swaps, options, and swaptions for select commodities as of Q1 2012 and is phasing in other commodities as industry rules and regulations crystalize globally.

Who can use the service?

All commodity market participants are eligible to use the service. To date DTCC & EFETnet are working with energy utilities & producers, agriculture companies, as well as numerous financial service providers to ensure broad market adoption.

The Benefits

DTCC-EFETnet’s low-cost model allows users to submit trades to the repository at low costs while fulfilling reporting obligations to regulators globally. In addition, participants will have several connectivity choices when interfacing with the repository including MQ, Secure FTP, web upload and B2B web services. Trade submissions will be accepted directly from firms in several message formats including FpML,CpML and CSV.

Firms can also use the service to identify the Reporting Party to meet US regulations, generate a unique trade identifier to ensure accurate reporting and disseminate the unique identifier to all parties to the trade in a format that automatically establishes the vital link to their internal trade ID.

DTCC’s Over-The-Counter (OTC) Derivatives Regulatory Portal provides regulators worldwide with direct, on-line access to global OTC derivatives data pertinent to their specific areas of jurisdiction in a timely, fair and seamless manner, without any preferential treatment across geographic boundaries and home borders. The framework for the portal is based on the data sharing guidelines outlined by the 50+ regulators and supervisors worldwide that make up the OTC Derivatives Regulators’ Forum (ODRF).

Tailored Views

The portal allows for each regulator to access reports tailored to their specific entitlements as a central bank, market regulator or a prudential supervisor. The detailed reports are created for each regulator to show only the data relevant to its jurisdiction, regulated entities or currency, at the appropriate level of aggregation.

Regulators are able to search for transaction information by product or market participant. The data can also be viewed in the currency of denomination in which the regulator is domiciled. Examples of the information reports available to regulators via the portal include:

• Counterparty Exposure Report – buy/sell positions for the regulated entity aggregated by counterparty and underlying
• Reference Entity Exposure Reports – buy/sell positions aggregated by underlying and counterparty

Scale and Security

Through its subsidiaries, DTCC provides clearing, settlement, and information services for virtually all equities, corporate and municipal bonds, U.S. government securities, mortgage-backed securities, commercial paper, and other money market instruments in the U.S. markets.

Commensurate with the ability to deliver these services on a large scale to firms of any size, DTCC assures the necessary security, privacy, and confidentiality that support your trades and the seamless functioning of the markets.

Governance

The new repository will be governed by a user board consisting of industry participants that use the service. It is expected that as more commodities are offered as part of the repository service, more firms will be invited to participate on the board. One of the duties of the board will be to determine a cost structure with the intent to mutualize costs appropriately among its user base.

The Global Solution

We are the global solution that promotes transparency and fosters participation amongst its users. The partnership of DTCC and EFETnet combines years of global commodity experience with extensive and proven repository knowhow while providing the service at a low-cost. For more information, please contact Erin Hunzeker at DTCC at 678-575-3844 or visit www.dtcc.com.

About EFETnet

EFETnet B.V. is an independent company 100% owned by the European Federation of Energy Traders (EFET). EFET was founded in 1999 by Europe’s leading energy companies. EFETnet B.V. was set up in 2004 by EFET to service those actively involved in energy trading. It is intended to deliver the benefits of electronic data exchange standardization that was first pioneered by EFET and its members. It acts as a cost sharing vehicle for the industry as a whole, thus delivering a guaranteed level of data exchange services to all market participants at optimal cost.