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Evolution of DTCC's Repository & Derivatives Services

DTCC’s Repository and Derivatives Services (RDS) is a growing business dedicated to providing industry-leading solutions for trade reporting and derivatives processing.

Repository Services helps firms meet their reporting obligations for derivatives and securities financing transactions (SFT) through DTCC’s Global Trade Repository service (GTR).1  Derivatives Services automates critical processes at key points in the post-trade lifecycle of credit derivatives through the Trade Information Warehouse (TIW, or the Warehouse). And RDS Plus, a suite of additional service offerings, provides tools that enable users to address the quality of their derivatives and SFT trade data.

History of RDS

DTCC pioneered ground-breaking derivatives services in 2003 when it created a payment reconciliation service to match quarterly coupons on credit default swaps. It subsequently established an automated confirmation and matching service, a much-needed replacement of the use of faxes to document confirmations of counterparties' transactions.2 

In 2006 DTCC established TIW, the industry’s first infrastructure for record retention and asset servicing of credit default swaps. TIW’s robust infrastructure provides automated operational capabilities across multiple functions -- position management, cashflow calculations, netting calculations, central settlement messaging and lifecycle processing -- for approximately $10 trillion in notional value of credit default swaps worldwide. Virtually all of the world’s credit derivative contracts, excluding wealth management, inter-affiliate contracts and some prime brokerage, are now recorded in the Warehouse.

Following the 2008 financial crisis, various jurisdictions acted to effectuate commitments made by the Group of 20 (G20)3  to increase transparency and reduce risk in the over-the-counter (OTC) derivatives market by passing legislation that empowered the establishment of trade repositories (TRs). Subsequently, through a Request for Proposals (RFP) process, DTCC was selected by the industry to build and manage TRs for derivatives across multiple asset classes.

DTCC created GTR to fulfill this charge and in 2012 and 2013 received regulatory authorization for its first TRs, in the U.S. and in Japan and the U.K., respectively, for compliance with Commodity Futures Trading Commission (CFTC), Japan's Financial Services Agency (JFSA) and European Securities and Markets Authority (ESMA) derivatives mandates. Over the next five years additional repositories were created in Asia-Pacific (APAC) jurisdictions and the U.S. trade repository was designated for Canadian reporting. 

Repository Services/GTR

RDS's GTR is the premier transaction reporting solution for clients and regulators worldwide. Supported by its global, open-access infrastructure, GTR has established a successful track record in helping the industry mitigate risks, automate processing, enhance transparency and drive down costs arising from emerging regulatory requirements around trade reporting.

Because DTCC is the only user-owned and governed global provider of transaction reporting services, its GTR service is uniquely positioned to develop industry-leading reporting tools and solutions in the derivatives and securities financing transaction (SFT) markets. All users derive added value from this user-owned and governed utility model. This development-and-reinvestment cycle increases GTR’s flexibility to utilize GTR’s existing infrastructure to create new client solutions in partnership with industry participants.

As of 2019 GTR through its registered/licensed TRs provides reporting services for OTC derivatives transactions in the U.S., Canada, Singapore, Hong Kong (as an agent), Japan and Australia and both OTC and exchange-traded derivatives in Europe. In January 2019 the Swiss Financial Market Supervisory Authority authorized DTCC Derivatives Repository Plc (DDRL), the GTR repository serving Europe, as a Foreign Trade Repository in Switzerland, enabling GTR to fully support both European Market Infrastructure (EMIR) and Switzerland's FinfraG regulations from a single platform.

1. DTCC offers the Global Trade Repository service through its registered/licensed trade repositories. 

2. The confirmation service was subsequently contributed to MarkitSERV LLC when it was a joint venture between DTCC and Markit N.A. IHSMarkitSERV continues to provide a confirmation service.

3. The G20 is a forum comprising the finance ministers and central bank governors from 19 countries plus the European Union (EU).