Brightbridge Wealth Management Headlines: EFETnet and DTCC Selected by Industry to Develop Commodity Derivatives Trade Repository
Collaboration Combines EFETnet’s strength in the commodities market with DTCC’s in OTC derivatives trade repositories
NEW YORK & AMSTERDAM–(BUSINESS WIRE)–EFETnet and DTCC Deriv/SERV LLC (DTCC), announced that the two at-cost, user governed industry cooperatives are collaborating with market participants in the commodities industry to establish a global Commodity Derivatives Trade Repository. The proposed new repository, which will be domiciled in Europe and jointly owned by DTCC and EFETnet, follows EFETnet and DTCC being selected by the International Swaps and Derivatives Association, Inc.’s (ISDA) Commodities Steering Committee to work with the industry on the next stage of development for this new service.
EFETnet and DTCC’s industry non-commercial cooperative models will create a joint neutral platform where many competing organizations can come together to participate in a single non-commercial reporting solution. Such a single, non-commercial, truly transatlantic solution allows regulators globally to receive from one source most if not all of the OTC commodity derivative trade data in which they have a regulatory or supervisory interest – without each regulator having to aggregate data from multiple sources which may result in double counting or omissions, or simply in improper understanding due to variations in data formatting. It will also allow aggregate market information made available to the general public to be more complete and accurate.
The joint-venture integrates EFETnet’s vast experience in the commodities arena and its deep network of contacts in the user community with DTCC’s proven track record in building global trade repositories. The combination also brings together representatives of the purely commodity trading community with representatives of the financial services community, and, although the joint venture will be headquartered in Europe, it will be a truly transatlantic strategic partnership.
The joint-venture between EFETnet and DTCC, which is subject to final documentation, brings together EFETnet’s secure data communications and post trade processing capabilities as well as DTCC’s repository and regulatory reporting infrastructure. The combination will provide the commodities industry with an at cost, industry owned and governed cooperative to streamline reporting to multiple regimes.
“This joint EFETnet and DTCC initiative, in partnership with the industry, is truly an international exercise that aims to meet the current and future regulatory needs of our customers in the commodity derivatives market,” said Jan van Aken, Secretary General, EFET. “We are pleased to partner with DTCC to develop a service that will ultimately record all commodity OTC derivatives transactions, which can only strengthen the infrastructure for the trading of these instruments.”
“DTCC remains committed to partnering with the industry and regulators globally to strengthen, bring greater clarity and mitigate risk in the OTC derivatives market,” said Peter Axilrod, managing director, Business Development and OTC Derivative Services, DTCC. “EFETnet’s expertise in working with the European commodities and energy user community is a strong complement to DTCC’s experience automating and bringing increased safety into the OTC derivatives market. We believe our joint service delivers a great value proposition to market participants in this asset class.”
EFETnet was established by the European Federation of Energy Traders (EFET) an organization founded in 1999 by Europe’s leading energy companies and is used for EFET and non-EFET energy trading contracts.
EFETnet B.V. is an independent company 100% owned by the EFET. It was set up in 2004 by EFET to serve those actively involved in energy trading and is intended to deliver the benefits of electronic data exchange standardization that was first pioneered by EFET and its members.
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC’s depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US$36.5 trillion. In 2010, DTCC settled nearly US$1.66 quadrillion in securities transactions. DTCC has operating facilities and data centers in multiple locations in the United States and overseas. For more information, please visit www.dtcc.com.
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