DTCC plans repository service as rules tighten

JIJI

Depository Trust & Clearing Corp. of the United States is set to offer a new service in Japan from November in line with the planned introduction of stricter international financial regulations, company officials said.

DTCC, a provider of settlement and clearing services for securities transactions, opened an office in Japan in July in preparation for the service.

Following the global financial turmoil after the 2008 collapse of U.S. investment bank Lehman Brothers, financial institutions will be required in stages from November to store data on financial transactions and report them to regulators so more visibility is introduced into over-the-counter derivatives trading and to reduce risks to financial stability.

In Japan, DTCC plans to offer the data storage and reporting service on behalf of financial institutions, a company official said.

DTCC has to be designated by the Financial Services Agency as an entity qualified to provide the repository service in the country.

“It is our plan to achieve successful registration by November, and we believe it is on schedule,” the official said.

“The trade repository for Japan will hold most OTC derivatives trades done by financial firms regulated by” the FSA, the official said, adding DTCC will make the trade information available to the agency “for any regulatory analysis they wish to do.”

The service is expected to help Japanese financial institutions reduce costs related to the data storage and reporting requirements after the new regulations are put in place.

“We operate for the benefit of the financial services industry, in an effort to lower costs and improve efficiencies for the entire industry,” the official said.

DTCC has already launched such repository services in the United States, Britain and the Netherlands, and is planning to launch the operations in Singapore in addition to Japan.