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by Craig Donner

With debate in Europe on financial reform legislation moving into a critical phase of negotiations in early 2011, DTCC hosted Michel Barnier, commissioner for Internal Market & Services for the European Commission, for a briefing on the company’s 37-year history of providing stability and certainty to global financial markets.

“Briefings with key policymakers are an essential part of our external affairs strategy and give us an opportunity to explain the role DTCC can play in a regulatory reform environment,” said Donald F. Donahue, DTCC chairman and CEO. “We were delighted to meet with Commissioner Barnier at this critical juncture to showcase DTCC’s capabilities in bringing greater transparency and risk mitigation to the market.”

More on Barnier

Barnier is a central figure in the financial reform debate in Brussels. He oversaw the drafting of the European Market Infrastructure Regulation (EMIR) for the Commission and will help shape the final text by leading negotiations (called trialogues) between the Parliament and Council (member states) to resolve conflicts over the legislative language.

Several of Barnier’s key advisors joined him at the briefing, including Paulina Dejmek, member of the Barnier cabinet with responsibility for financial services policy; Petrus Kerstens, first counselor, Economics and Finance, U.S. Delegation of the European Union (E.U.); and Chantal Hughes, spokesperson for the Commissioner for Internal Market & Services, European Commission.

Enhancing transparency

EMIR is one of the key proposals of financial reform that will be considered by the European Union in the coming months. It focuses only on over-the-counter derivatives, clearinghouses and trade repositories. As a result, DTCC focused the majority of its briefing with the Barnier delegation on the key functions and benefits of the Trade Information Warehouse (TIW) and the Equity Derivatives Reporting Repository, including a demonstration of a new regulatory portal that will give regulators direct unfettered access to real-time data on virtually all credit default swaps transactions held in the repository.

“Commissioner Barnier recognized the tremendous value of this data in helping regulators monitor systemic risk for entities in their jurisdictions,” said Larry Thompson, DTCC managing director and general counsel. “In our discussions, we emphasized DTCC’s firm and unwavering commitment to providing European regulators access to the data they need to carry out their responsibilities. To reassure regulators of this point, we recently established an E.U.-based repository regulated by the Financial Services Authority that will hold identical aggregate data sets to information in the TIW.”

Harmonizing regulations

The need to harmonize new regulations globally was also a topic of discussion. The issue is particularly important to European legislators and regulators, who are debating EMIR at the same time U.S. regulators are drafting and implementing new rules under the Dodd-Frank Act, which was passed by the U.S. Congress and signed into law in July.

“We are committed to acting as a bridge between Europe and the United States to ensure that global viewpoints are taken into consideration on financial reform and that the European view is taken into account during rulemakings for Dodd-Frank,” Thompson said. “We believe that all jurisdictions must work collaboratively to ensure regulatory arbitrage does not occur and that best practices are implemented.”

At the conclusion of the briefing, Barnier and members of his delegation expressed interest in arranging follow-up meetings with DTCC and other Commission staff to illustrate the quality and breadth of data held in the TIW and European repository. Those meetings will dovetail with additional outreach planned for the remainder of 2010 as part of DTCC’s government relations and public affairs strategy. DTCC is continuing to meet with key stakeholders in the financial reform debate, including Members of the European Parliament, the Council and regional regulators. @