Mark Wetjen, DTCC Managing Director and Head of Global Public Policy
The Depository Trust & Clearing Corporation (DTCC) participated in the 31st Annual Futures Industry Association (FIA) Futures and Options Expo in Chicago. Approximately 3,000 industry participants attended the conference, bringing together industry professionals, regulators and policymakers.
Mark Wetjen, DTCC Managing Director and Head of Global Public Policy, and Marisol Collazo, DTCC Managing Director and CEO of DTCC’s Data Repository, U.S., LLC (DDR), participated in the conference which took place November 3-5.
Panel Discussion: Washington Outlook
Wetjen participated in a panel discussing whether U.S. policymakers will play it safe or shake things up leading to the 2016 Presidential Election. The panel highlighted how recent leadership changes in Congress and upcoming changes in the next Administration may impact current public policy debates. Ben White, Chief Economic Correspondent at Politico, served as moderator and speakers in addition to Wetjen included:
- Terrence Duffy, Executive Chairman and President, CME Group
- Richard Gorelick, Chief Executive Officer, RGM Advisors
- Walt Lukken, President and Chief Executive Officer, FIA
- Dan Roth, President and Chief Executive Officer, National Futures Association
While Wetjen concurred with fellow panelists that not much critical policymaking is likely to occur prior to the election, he highlighted three potential areas of opportunity: omnibus legislation, tax extenders, and the highway bill.
In response to a question regarding the impact of Washington, D.C. on financial markets, Wetjen noted the importance of the recent ability of members of Congress to come to an agreement on the U.S. budget. However, Wetjen cautioned that if the U.S. borrowing authority isn’t extended in future votes, there could be a potential erosion of confidence and potential negative impact on how the world views the U.S.
Focus on Data Reporting
“A key theme discussed throughout the conference was industry and regulatory efforts to further strengthen and improve swaps data reporting,” explained Collazo. “While a massive amount of data is being collected, more work lies ahead to ensure data consistency and aggregation, in addition to the establishment of cross border access guidelines.”
Efforts surrounding swaps data reporting were reiterated during the keynote address delivered by Commodity Futures Trading Commission (CFTC) Chairman Timothy Massad. The chairman reminded the audience that in 2008, there was virtually no reporting of swap positions or transactions, which made it difficult for regulators to act during the financial crisis. He highlighted that things are different today and stressed that regulators and market participants are seeing the benefits of swap data reporting. As an example, Massad highlighted DTCC’s Real Time Dissemination Dashboard, which provides real-time price information.
“While a massive amount of data is being collected, more work lies ahead to ensure data consistency and aggregation, in addition to the establishment of cross border access guidelines.”
Marisol Collazo, DTCC Managing Director and CEO of DTCC’s Data Repository, U.S., LLC (DDR)
The chairman discussed reporting improvements and highlighted challenges regarding data completeness and ensuring high quality, consistent data. He stressed that there has been a dramatic improvement in data completeness across a number of data fields and encouraged swap data repositories to continue using tools, such as heat maps, to improve the quality of reporting. Massad also indicated that potential changes regarding data reporting may be proposed next year.
While calling for more consistent and high quality data, Massad highlighted international efforts currently underway to harmonize data reporting standards. “Proposing standardized fields may require market participants to make changes in the way they report,” explained Massad in prepared remarks. “However, we believe that this will ultimately reduce reporting burdens and enhance quality of data for everyone.” DTCC has been actively engaged in data harmonization efforts and earlier this year provided recommendations to CPMI IOSCO, detailing a proposed path towards global data harmonization with credit derivatives identified as the first step.
Related: DTCC Issues Proposal to CPMI IOSCO for Global Data Harmonization
During his speech, Massad also discussed refining swap identifiers including the Legal Entity Identifier (LEI), the Unique Transaction Identifier and the Unique Product Identifier. The chairman called for expansion of the usefulness of the LEI so that related entities can be identified and to aggregate positions or transactions among them, which currently is not possible. “Aggregation is particularly important given that many market participants have a number of affiliates. We can aggregate entities manually by name, but that is time consuming and not always accurate,” explained Massad. “We are working closely with the LEI Regulatory Oversight Committee and other regulators to develop solutions that will address this challenge.”
In closing, Massad reiterated that while significant work remains, substantial progress has been made and greater transparency exists today.