New York, July 24, 2012 – The Depository Trust & Clearing Corporation (DTCC) and SWIFT announced today that they have been named by the Commodity Futures Trading Commission (CFTC) to provide the CFTC Interim Compliant Identifier (CICI) for legal entities involved in OTC derivatives trading.
"We are pleased that the CFTC has recognized the strength and immediate readiness of the DTCC/SWIFT proposal for the CICI program," said Michael Bodson, DTCC President and CEO. "We expect to move rapidly to provide CICIs for organizations that are required by the CFTC to submit transactions to swap data repositories, to identify both the dealers and their counterparties around the world."
The CICI is designed to be an identifier for all legal entities dealing in OTC derivatives falling under CFTC jurisdiction until an international program for a Legal Entity Identifier is launched, which is expected by March 2013. DTCC and SWIFT have already assigned and validated information on more than 24,000 provisional CICIs for legal entities, many of which are involved in OTC derivatives trading, and made them available through the Global Financial Markets Association (GFMA) website.
Firms involved in the OTC credit and interest rate derivatives markets will shortly be able to register for and be assigned an identifier using DTCC and SWIFT’s system prior to the effective date of the CFTC transaction reporting and recordkeeping rule. CICIs will be required to be used by counterparties in those markets 60 days after certain swap definitions are published by the CFTC in the Federal Register. While the CFTC has finalized those definitions, they have not yet appeared in the Federal Register, although they are expected shortly. "In addition to helping the industry cost-effectively meet this regulatory reporting requirement, providing identifiers and validated reference data associated with the entities will also provide important risk management benefits for the financial industry," Bodson noted.
Chris Church, Chief Executive, Americas and Global Head of Securities, SWIFT added, "This is a major milestone and a great step towards helping the industry resolve a major challenge affecting the global financial markets. We are pleased to have been selected and look forward to working with DTCC to further minimize systemic risk and drive down costs for the industry."
DTCC and SWIFT are also working with the Association of National Numbering Agencies (ANNA) to incorporate National Numbering Agencies as federated registration and validation facilities. A federated operating model has been recommended by the Financial Stability Board (FSB) to the G-20 nations. DTCC, SWIFT, ANNA and ISO had previously been recommended by a broad group of industry trade associations lead by GFMA and will work together to adapt this industry solution for the global regulatory community under the governance framework and operating model being proposed for the global Legal Entity Identifier program by the FSB.
Through multiple operating facilities and data centers around the world, DTCC and its subsidiary companies automate, centralize, and standardize the processing of financial transactions for thousands of institutions worldwide. With almost 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2011, DTCC processed securities transactions valued at approximately US$1.7 quadrillion. Its depository provides custody and asset servicing for securities issues from 122 countries and territories valued at US$39.5 trillion. DTCC’s global OTC derivatives trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide across multiple asset classes. For more information, visit www.dtcc.com.
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 financial institutions and corporations in 212 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.