SIX to set up Swiss trade repository for OTC derivatives
Switzerland’s SIX Group is to adopt T+2 settlement
Switzerland’s SIX Group is planning to set up a central trade repository or derivatives transactions together with a group of Swiss banks, in a move the company says will increase transparency and traceability of derivatives transactions.
The project is based on the Swiss Financial Market infrastructure Act, a new piece of federal legislation which seeks to implement the G20 agreement of 2009 on reducing systemic risk in OTC derivatives markets by increasing transparency. The measures centre on settling OTC contracts through central counterparties and trade reporting to trade repositories. In Switzerland, the new rules are due to enter force at the end of 2015 or in early 2016.
The trade repository to be created by SIX will need to record the details of derivative transactions that must be reported by banks and outer counterparties. Following validation and a consistency check, the information will be passed on to the Swiss authorities, as well as aggregated and published to the public in anonymised form.
Similar measures are being introduced across Europe and in the US. On 12 February, trade reporting became mandatory for all market participants trading derivatives in the European Union, as part of the European Market Infrastructure Regulation. Meanwhile in the US, trade reporting is currently being phased in by asset class under the Dodd-Frank Act. However, some industry experts have expressed concerns that the global reform agenda may be hampered by a lack of LEIs, and a lack of preparation among some segments of the market.
