Regulatory compliance is a key issue for market participants across the post-trade space. New regulations have led to significant mandates on financial firms while recent geopolitical events continue to create uncertainty.
We continue to work with our clients to help them understand how new and existing regulations, such as the Central Securities Depositories Regulation (CSDR) and uncleared margin rules (UMR), can affect their post-trade processes, and offer solutions to address these various challenges.
CSDR aims to harmonize post-trade processes and financial markets infrastructures in the European Union. CSDR will impact all types of firms that trade in the European Union and EEA, regardless of where they are located. To achieve this goal, CSDR has established the Settlement Discipline Regime (SDR) that will enforce mandatory buy-ins and penalties for failed trades.
Prevention of failed trades is key to avoiding buy-ins and penalties. DTCC’s ITP services help support CSDR compliance, minimizing the risk of trade failure by ensuring that clean and accurate golden source data are used to create an authoritative trade record, automated processing through a no-touch workflow and efficient exception management.
UMR require firms using over-the-counter derivatives to post margin daily to cover market and credit risk. The increase in margin calls and the need for liquidity across the industry will potentially strain firms’ capacity to process collateral, resulting in fails and bottlenecks. The Margin Transit Utility (MTU) tackles this challenge by eliminating many manual touchpoints experienced in the collateral processing workflow for dealers, buy-side firms, administrators and custodians.
By leveraging automation, MTU allows you to efficiently validate, enrich, settle, report and monitor matched collateral calls globally while easily connecting to and sharing information with multiple counterparties.