Trade Repository Reporting

Trade repository reporting is the requirement for counterparties to derivative contracts to send the details of each contract, and of later changes to it, to a trade repository: a regulated central database that collects and stores the data and makes it available to authorities. Reports cover who the counterparties are, what was traded, notional amounts, prices, collateral and valuations, and are updated throughout the life of the contract. The aim is to give regulators a view of exposures across the market, so they can spot dangerous concentrations of risk.

Repository reporting grew out of the G20 commitment in 2009, after the financial crisis, that all over-the-counter derivatives contracts should be reported. In the European Union it is required by EMIR; in the United States, swaps are reported to swap data repositories under the Dodd-Frank Act. It differs from regulatory transaction reporting, which serves market abuse surveillance.

Before 2008, regulators were like fire wardens who could not see inside the buildings they were meant to protect. Banks had made huge promises to each other through private contracts, and no one could tell who would be hurt if one of them collapsed.

Trade repositories are the central records office that fixes this. Every time two firms agree a derivative, they file the details with a repository, and update the file as the contract changes. Regulators can then look across all the records and see who owes what to whom, how much collateral is posted and where risks are piling up.

Article 9 of EMIR requires both counterparties to every derivative contract, including exchange-traded derivatives as well as OTC trades, to report the conclusion, modification and termination of the contract to a registered trade repository by the end of the next working day. Key features include:

• Dual-sided reporting. Both parties report, and the repository reconciles the two reports.
• Delegated reporting. Since the 2019 EMIR Refit, financial counterparties are generally responsible for reporting on behalf of smaller non-financial counterparties.
• Standard identifiers. Reports use the Legal Entity Identifier, a unique transaction identifier shared by both parties and, increasingly, a unique product identifier.
• Valuations and collateral. Daily updates of mark-to-market values and collateral, including variation margin, are required for many counterparties.

Revised technical standards applied from April 2024 in the EU, introducing reporting in ISO 20022 XML format and more than 200 data fields, and the United Kingdom introduced similar changes under UK EMIR later in 2024. The EU's Securities Financing Transactions Regulation applies a comparable regime to repos and securities lending. Trade repositories themselves are regulated entities: in the EU they are registered and supervised by the European Securities and Markets Authority, which sets rules on data access, security and the reconciliation of reports between repositories, and in the UK by the Financial Conduct Authority.

Under Dodd-Frank, swaps regulated by the CFTC are reported to registered swap data repositories. Unlike EMIR, reporting is generally single-sided: a hierarchy decides which counterparty reports, usually the swap dealer. CFTC rules separate regulatory reporting of full trade details from real-time public reporting of anonymised price and volume data soon after execution. Security-based swaps, such as single-name credit default swaps, are reported under the SEC's Regulation SBSR.

Firms build reporting from trade capture and lifecycle systems, often using vendors or delegating to dealers. Common difficulties include agreeing and sharing transaction identifiers with counterparties, keeping reference data such as LEIs current, reporting lifecycle events like novations and compressions correctly, and reconciling with the other side. Reporting is closely tied to derivative trade confirmation, since confirmed terms should match the reported ones, and to clearing, since trades cleared through a central counterparty generate new reportable contracts. Regulators publish data quality findings and have fined firms for late, missing or inaccurate reports.

Authorities use repository data to monitor concentrations of exposure, measure interconnectedness between institutions, support resolution planning and analyse market events, such as stress in commodity or interest rate swap markets. International bodies have worked to harmonise key data elements so that data from different jurisdictions can be combined. However, differences in rules between regions, inconsistent data quality and the volume of reports have limited how easily the data can be used, and the global aggregation of derivatives data envisaged in 2009 remains incomplete.