A Study On The OTC Derivatives Trade Repository System

After the subprime mortgage crisis in 2008,the international community formed a new "four-level" global financial governance system by creating the FSB to coordinate the diversified global financial governance subjects.As the main culprit of the spread of the crisis risk and the expansion of losses,OTC derivatives market reform has become one of the key issues in the post crisis era.In September 2009,G20 leaders reached a series of consensus on the reform of OTC derivatives market,including the creation of a new financial market infrastructure trade repository to enhance the transparency of OTC derivatives market,reduce systemic risks and prevent market abuse.Under the new system of"four-level" global financial governance,the trade repository system has experienced a "top-down" development process.Under the coordination of FSB,CPSS and IOSCO have formulated and issued a series of international financial standards related to trade repository,which can be used as reference for all jurisdictions in the world.From the perspective of system scope,the trade report system includes data standardization,trade report and access to data,trade repository regulation and data aggregation.For data standardization,legal entity identifier(LEI),unique product identifier(UPI),unique transaction identifier(UTI)and OTC derivatives critical data elements(CDE)data standards have been formulated and gradually implemented in major countries in the world.At the same time,the supporting "three-level" data standardization governance system has been preliminarily established,especially the technical and representative supervision layer-the Regulatory Oversight Committee(ROC)will play a core role in the field of financial data standardization,and its importance will become more and more prominent.For trade report and access to data,on the one hand,the United States and the European Union are traditional financial powers and regions,and their regulatory rules have strong extraterritorial effect.It is objectively difficult for cross-border companies to bypass the constraints of the regulatory rules of the United States and Europe when engaging in OTC derivatives business;On the other hand,the United States and Europe have rich practical experience in the field of trade repository operation and supervision.Therefore,it is necessary to dynamically track the trade report and access to data rules in the United States and Europe,so as to grasp its latest development trend and provide a reference scheme for other countries and regions to establish and improve the trade report and access to data system.From a cross-border perspective,repetitive reports and difficulties in obtaining data from overseas regulators are the main problems.For this,adopting "substituted compliance" and seeking bilateral or regional cooperation arrangements between regulators are optional solutions.As for the supervision of the trade repository,as a newly created financial market infrastructure after the crisis,the trade repository is of systematic importance.It is necessary to impose strict legal supervision from the aspects of market access,corporate governance and operational reliability,so as to ensure the safe issuance of data and prevent systemic risks.On the basis of existing international standards,countries all over the world should appropriately learn from the relevant institutional arrangements of the United States and Europe on the supervision of trade repository,and establish and improve corresponding laws and regulations.At the same time,cross-border regulatory coordination measures such as effective and reasonable construction of deference system,promotion of information exchange between cross-border regulators to strengthen cooperation and mutual trust between the two sides can reduce the negative impact of cross-border regulatory conflict of trade repository to a certain extent.For data aggregation,the lack of global data aggregation mechanism is an indisputable fact.The problems caused by it,such as differences in the implementation of data standards,repeatability of trade report,difficulties in obtaining cross-border data,regulatory conflicts of trade repository,have not been effectively solved at the international level.There is no doubt that the international community to strengthen cooperation and jointly build a global trade repository is the fundamental solution to the above problemsFrom the perspective of the development of China’s trade repository system,China has initially completed the establishment of trade repository and the legislative work of corresponding rules.At present,China has set up five trade repositories and TR-like entities.CFMMC-TR,CSIS and HKTR are trade repositories recognized by FSB in Chinese mainland and Hongkong.At the same time,there are two other TR-like entities in mainland China,namely CFETS and NAFMII,which are oriented to different derivatives in different markets.However,compared with the developed countries in Europe and the United States,the development of trade repository in China,especially in the mainland,is relatively backward.Therefore,on the basis of reasonably examining the existing defects of the trade repository system,China should take timely measures to promote the improvement and development of the trade repository system,including:expanding the scale of OTC derivatives market,enriching the types of OTC derivatives;improve the innovation ability of trade repository and expand the service scope;in line with international standards,improve the legal system of China’s trading report base;actively participate in the construction of the global trade repository system,and issue the voice of China.