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EU watchdog fines DTCC's UK derivatives repository almost $500,000

By Reuters

LONDON – The European Union’s securities watchdog said on Monday it has fined the UK-based trade repository arm of U.S. clearing house DTCC a total of 408,000 euros ($484,418) for “negligence” over a four-year period.

Trade repositories were set up in the aftermath of the global financial crisis to improve transparency in markets by keeping a record of derivatives transactions for regulators to spot risky positions faster.

The European Securities and Markets Authority (ESMA) said DTCC‘s London-based Derivatives Repository Plc (DDRL) gave certain asset managers access to data they were not entitled to receive.

It also failed to provide regulators with direct and immediate access to relevant data, ESMA said, adding the breaches occurred between 2014 and 2018, before Britain fully left the EU in December last year.

“The provision of timely, accurate and confidential data to CCP (central counterparty clearing houses) and derivatives markets supervisors is an essential requirement in facilitating the monitoring and identification of systemic risk in EU derivatives markets,” ESMA‘s interim chair Anneli Tuominen said in a statement.

DTCC, which has a right of appeal, said it takes its responsibilities to provide derivatives reporting services very seriously.

DDRL has addressed the issues identified in ESMA’s findings and remains committed to delivering these services in accordance with all relevant rules and regulations,” DTCC said in a statement.

Before Brexit, DDRL had the largest market share among repositories in the EU.

($1 = 0.8422 euros)