Trade Repositories and their role in the financial marketplace

Manish Kumar Singh, Susan Thomas

A regulatory response to the Credit Crisis of 2008 was to bring more transparency into the structure and value of Over-the-counter (OTC) derivative products using institutional mechanisms. Of these, trade repositories were the most implemented and used. Trade repositories are visualised to be a source for all information about outstanding OTC derivatives positions. This view is important to authorities that require to (a) monitor and supervise market participants, (b) carry out market surveillance and (c) assess systemic risk. It is also a useful function for market participants in order to understand their own risk and their marginal risk with respect to any specific counterparty to their transactions. The note reviews what trade repositories are, as well as their role and function in the financial system, along with a brief description of these institutions in other jurisdictions.

Citation: Trade Repositories and their role in the financial marketplace, Manish Kumar Singh and Susan Thomas, FRG Technical Note, March 2011.