Traiana, the bank and brokerage-owned provider of post-trade solutions, has announced the successful start of its Harmony TR Connect swap data repository service, which is aimed at the changing over-the-counter (OTC) derivatives market and to assist users in complying with the new Dodd-Frank regulations that are now in force, mandating centralised clearing and reporting.
Harmony TR Connect aims to provide all financial market participants with the ability to comply with the trade reporting requirements under the US Dodd-Frank framework and the EU’s European Market Infrastructure Regulation (EMIR), which starts in Q1 2014. Both regulations effectively force OTC trading ‘on exchange’ post-crash in accordance with the G20’s wishes and insist upon enhanced reporting and transparency duties after the difficulties tracking and unwinding Lehman Brothers’ trades post-crash.
The new service from Traiana offers a single point of connection for post-trade reporting of foreign exchange (FX), interest-rate and credit default swap (CDS) trades.
According to Traiana, which is owned by the ICAP brokerage that sold a 12% stake in it to seven banks at the turn of the year including Barclays, Citi, RBS and JP Morgan among others, the Harmony TR Connect platform is designed to create an industry-standard solution for derivatives trade reporting that will extend the ability to report to the US’ Depository Trust & Clearing Corporation (DTCC) Global Trade Repositories, and other trade repositories in Europe and elsewhere as required under the Dodd-Frank and EMIR regulations.
Electronic platforms and inter-dealer brokers that will potentially register as swap execution facilities (SEFs) or as multilateral or organised trading facilities (M/OTFs) under the EU’s Markets in Financial Instruments Directive (MiFID) are already working with Traiana, claims the vendor, in order to ensure that they can comply with their particular reporting requirements under the new US and European regulations that are now coming into force.
“Traiana continues to work with market participants to understand and deliver the solutions required to meet the global regulations. We are excited to be working with DTCC to deliver standardised and consistent trade reporting on behalf of a broad range of financial institutions operating in global OTC derivatives markets,” said Andrew Coyne, chief executive officer (CEO) of Traiana.
As well as providing a seamless connection to the DTCC Data Repository in the US, the US multi-asset class swaps data repository (SDR) - and, via DTCC, to regional trade repositories as required - Harmony TR Connect seeks to provide a messaging hub for connectivity between market participants and trade repositories, supporting the workflow, smart order routing, and state management associated with reporting activities. This includes key functions such as initial trade reporting, unique swap identifier generation, Legal Entity Identifier (LEI)/Unique Product Identifier enrichment, plus lifecycle and state management, trade amendments, cancellations and snapshot reporting.
The European Union’s EMIR directive will similarly require institutions to report their OTC derivatives trades to appropriate trade repositories by Q1 2014. The Dodd-Frank stipulations are already in force.
Kieran Salter, global head of FX at Commonwealth Bank, and one of the launch partners for the new platform, said: “Working with Traiana’s knowledgeable team to implement Harmony TR Connect helped us navigate the impact of Dodd Frank regulations on an Australian bank.”
Harmony TR Connect interoperates with the Harmony central counterparty (CCP) Connect clearing solution, which provides a workflow solution for client clearing via the Harmony network, including CCP connectivity and reporting as required under the new regulations, plus trade routing, affirmation, matching, allocation, and reporting services for centrally cleared OTC FX options and non-deliverable forwards (NDFs).
• Bobsguide will be reporting from the TradeTech Europe show, running 16-18 April this week, where Traiana is one of the many exhibiting companies. Look out for the show report blogs.