DTCC Connection

Apr 04, 2013 • DTCC Connection

DTCC Will Establish Japan’s First OTC Derivatives Trade Repository

by Michael Bellini

JapanThe Financial Services Agency of Japan (J-FSA) has approved DTCC’s registration to establish a Japanese over-the-counter (OTC) derivatives trade repository. Based in Tokyo and operated by DTCC’s subsidiary, DTCC Data Repository (Japan) KK (DDRJ), this is the first trade repository to be approved and established for the Japanese market. DTCC began the operation of this service, for market participants in Japan to begin reporting their OTC derivatives transactions directly to regulators or to a third-party trade repository, ahead of the J-FSA’s April 1, 2013, deadline for mandatory reporting.

Mitigating risk; working with regulators

“DTCC is pleased to be able to deliver to regulatory authorities and market participants in Japan a comprehensive, robust trade repository that brings greater transparency and risk mitigation to the OTC derivatives markets,” said Michael Bodson, DTCC President and CEO. “We are committed to working with supervisors to promote a safer environment for OTC derivatives trading as well as helping our clients in Japan and worldwide meet their reporting obligations.”

DDRJ supports trade reporting across four major OTC derivatives asset classes: credit, equities, interest rates and foreign exchange (FX). The service uses the same messaging and software capabilities as DTCC’s repository services in Europe and the U.S., ensuring consistency in the data accessed by regulators. The service also helps DTCC’s international clients avoid duplicative costs as they comply with reporting requirements in multiple jurisdictions across the globe.

Japan’s role in OTC derivatives

“The launch of a Japanese trade repository is a significant and welcome development for facilitating effective OTC derivatives trade reporting in this market,” said Keiko Fukuda, Executive Director at Morgan Stanley MUFG Securities Co., Ltd. “It is critical that there is in place a strong infrastructure that provides market participants with the ability to submit trades for regulatory supervision in a seamless and cost-efficient manner.”

“Japan continues to grow in prominence as an important component of OTC derivatives trading globally,” said Stewart Macbeth, President and CEO of DTCC’s Deriv/SERV LLC subsidiary. “DTCC is focused on providing regulators and our clients in Japan with the guidance and services they need locally.”

DTCC’s DDRJ subsidiary is also operating a client support office in Japan to help participants in this market comply with their current and future regulatory requirements.

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