CME and ICE Receive Trade Repository Approval from ESMA, Under Respective UK Subsidiaries

In advance of the reporting obligation start date for all asset classes that will begin on February 12, 2014 for certain European companies, the European Securities and Markets Authority (ESMA) has announced that two new Trader Repositories (TRs) have been approved, including ICE Trade Vault Europe Ltd. (ICE TVEL), based in the United Kingdom, and CME Trade Repository Ltd. (CME TR) also based in the United Kingdom, with registration effective on December 5th, 2013 for each firm respectively. This brings the total number of TRs to six as of publication, according to information listed on the ESMA website.

Both the CME and ICE, followed-up today with independent announcements concerning the news of their respective approvals as TRs under the above-mentioned entities. According to ESMA trade reporting is to start mid-February, and the TRs which are commercial firms that centrally collect and maintain the records of derivatives contracts which are reported to them.

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An indicative timeline updated on November 7th on the ESMA website displays EMIR related historical and upcoming reporting and application start dates and deadlines for TRs and Central Counterparties (CCPs), including related publications and submissions, as can be seen in the graph below:

The registration of a firm as a TR means it can be used by the counterparties for a derivative transaction to fulfill their trade reporting obligations under European Market Infrastructure Regulation (EMIR).

The main obligations under EMIR are:

• Central Clearing for certain classes of OTC derivatives
• Application of risk mitigation techniques for non-centrally cleared OTC derivatives
• Reporting to trade repositories
• Application of organisational, conduct of business and prudential requirements for CCPs

These include the application of requirements for trade repositories that have the duty to make certain data available to the public and relevant authorities.

ICE Releases Official Press Release following ESMA Announcement

Commenting in the related corporate announcement today from IntercontinentalExchange Group (ICE), the group parent of ICE Trade Vault Europe, regarding the new TR approval, David Peniket, Managing Director of ICE Trade Vault Europe said, “We appreciate ESMA’s detailed and comprehensive application process for trade repository applicants and we are pleased to launch this new and essential element of European market infrastructure.”

Mr. Peniket added in the official press release from ICE, “Thanks to ICE’s sophisticated technology and connectivity to execution venues and clearing houses, customers will find an accommodating and seamless service to meet the new reporting requirements under EMIR.”

According to the press release from ICE, in June 2012, ICE Trade Vault, LLC (ICE Trade Vault U.S.) became the first Swap Data Repository (SDR) in the U.S. to receive provisional regulatory approval from the Commodity Futures Trading Commission (CFTC), and since its inception ICE Trade Vault US has accepted over seventeen million trades.

Bruce Tupper, President of ICE Trade Vault said in the announcement today, “Since the development of ICE Trade Vault, our goal is to offer a global trade repository solution and the approval by ESMA advances that vision.”

Mr. Tupper concluded in the ICE press release,”We look forward to serving customers with an efficient and effective offering that satisfies their global regulatory and compliance demands.”

CME Press Releases of TR approval Following ESMA Announcement

In a concurrent press release today, CME Group, operator of a group of exchanges from within North America with offices spanning the globe, including its subsidiary that received approval yesterday from ESMA, announced that its multi-asset European(EU) trade repository, based in London, will accept submission of trades across all mandated derivative asset classes namely interest rates, FX, credit, commodities and equities.

As per the CME announcement, its TR will accept cleared and non-cleared, bilaterally settled, over-the-counter and exchange-traded derivatives executed on venues anywhere in the world. The reported data will be made available to the reporting entity itself, as well as relevant regulators, supervisors and authorities.

“Trade reporting of derivatives transactions is one of the major requirements of the post-crisis G20 summit and our CME European Trade Repository will enable sell-side and buy-side clients to ensure they are fully compliant in the EU,” said Jonathan Thursby, President, CME Global Repository Services. “This European addition to our existing CME Swap Data Repository in the US means that we can help our global and regional customers fully comply with multi-jurisdictional reporting.”

As per the official CME press release, in conjunction with its approved TR, CME Group will offer a delegated reporting service to its EU customers to comply with EMIR. By offering this service, CME Group is addressing the increasingly complex and burdensome reporting obligations its customers face by making it a straight- through processing activity of the CME Group’s global futures and swaps markets, according to the description in its official announcement today.