ESMA Slaps DTCC Derivatives Repository with €408K Fine

The trade repository had seven instances of violating data reporting provisions.

The European Securities and Markets Authority (ESMA) announced on Monday that it has imposed a total penalty of €408,000 on DTCC Derivatives Repository Plc (DDRL) for multiple violations in data reported under the European Market Infrastructure Regulation (EMIR).

The European Union regulator detailed that the trade repository made seven infringements regarding data confidentiality, data integrity and direct and immediate access to data. The breaches made between 2014 and 2018 were the result of negligence on the part of DDRL.

The regulator detailed that the breaches were related to data access to certain asset managers which they should not receive, setting up its IT system by altering the substance of certain information reported to DDRL, and failing to provide regulators with direct and immediate access to relevant data.

Further, the trade repository failed to provide direct and immediate access to its data to the regulators by generating reports based on incorrect data. It did not provide with transaction data they were entitled to receive in line with their responsibilities and mandates and failed to provide all transaction data regarding OTC derivatives contracts.

The Necessary Data Reporting Obligations

“Today’s action against DDRL emphasizes the importance ESMA places on trade repositories complying with their obligations on data confidentiality, integrity and access,” ESMA’s Interim Chair, Anneli Tuominen, said.

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“The provision of timely, accurate and confidential data to CCP and derivatives markets supervisors is an essential requirement in facilitating the monitoring and identification of systemic risk in EU derivatives markets.”

EMIR provisions mandate trade repositories to provide data to the regulators which ensures protection of confidentiality and integrity. According to the EU regulator, DDRL has become the first trade repository to breach data reporting obligations.

The trade repository can now appeal against ESMA’s decision to the Board of Appeal of the European Supervisory Authorities.

“ESMA will continue to monitor this area and take the necessary action to promote stable and orderly financial markets,” Tuominen added.

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