DTCC GTR Reconciliation and Operational Reporting
By simplifying complex regulatory requirements, firms can easily reconcile from swap data repositories with internal daily trade representations
12 September 2019
3 Minutes read time
We recently chatted with Val Wotton, Managing Director of Product Development and Strategy, Derivatives and Collateral Management at DTCC in our Unleash Your Data podcast. Here are some key takeaways.
Rules continue to be developed with local priorities that vary by location and this lack of a global approach to standardisation results in a fragmented set of data. The impact is that firms potentially have to report on the same trade in multiple jurisdictions with different identifiers, different reporting formats, different data fields and terms, and potentially even different messaging formats.
Firms have to find regulatory reporting data from different systems and different applications. There’s still a lot of legacy infrastructure with systems up to 30-40 years old. There’s also an increase in the number and scope of data elements that regulators require. Today, firms not only have to report on the trade itself but also position, valuation and collateral and this data all sits in different places.
To quantify the scale, if we look at it through just one lens: the DTCC’s GTR processes more than one billion messages per month covering over 40 million open transactions. And that is just one part of it.
People emphasise the importance of data quality and while it’s a perennial issue, it’s a misnomer that it is the most important of the challenges when it comes to trade reporting. Data standardisation is the key to enabling the industry to move forward in a number of different ways e.g. with new technologies. It is up to all of us in the industry to coalesce and continue to drive this and maximise the value of the data that we already have today.
The industry as a whole has worked really hard to create standards. But if we look at LEIs, UPIs and UTIs, only LEIs have really been picked up by most of the G20. If the industry can really put self-interest to one side, come forward for the common good, and stop being so jurisdiction-focussed, the potential benefits are significant – from the value you can get from that aggregated data, to the transparency for regulators, to the cost of compliance across the industry.
For more insight, listen to Val’s podcast episode here.