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Congressional Testimony

Larry E. Thompson, Managing Director and General Counsel | February 8, 2012

Chairman Garrett and Ranking Member Waters,

Thank you for the opportunity to submit a statement for the record on the issue of information sharing by U.S.-based swap data repositories (SDRs) and non-U.S. regulators pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA). The Depository Trust & Clearing Corporation (DTCC) remains concerned about the combined impact of the DFA’s broad extraterritorial reach and the confidentiality and indemnification agreement provisions. These provisions are fundamentally unworkable, as they do not recognize either foreign legal systems, or the inability of the U.S. to accept reciprocal demands from foreign entities. For reasons set forth in this statement, these provisions risk fragmenting the global data for over-the- counter (OTC) derivatives and undermining efforts to increase market transparency and to mitigate risk in this market. These provisions risk putting U.S. regulators in a position of having less complete information on swaps available to them in the future than they have today.

DTCC currently operates two subsidiaries specifically responsible for providing repository services to the global derivatives community: the Trade Information Warehouse (TIW) operated by The Warehouse Trust Company LLC for credit derivatives, a U.S. regulated entity; and DTCC Derivatives Repository Limited (DDRL) for equity derivatives, a U.K. regulated entity. In response to the G20 commitments made at the September 2009 Pittsburgh Summit, the Financial Stability Board (FSB) Report on OTC Derivatives Market Reform, and forthcoming statutory legislation in various jurisdictions, the international financial community recently selected DTCC’s DDRL entity to provide global repository services for interest rates and FX swaps. DTCC also was selected to operate the commodities repository (together with the European Federation of Energy Traders) under its newly established Netherlands entity, Global Trade Repository for Commodities B.V.

Download the Congressional Testimony: DTCC Statement for the Record, House Committee on Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises