What are Swap Data Repositories?
First sentence of the G20 Leaders Statement of the Pittsburgh Summit (September 24-25, 2009) preamble:
We meet in the midst of a critical transition from crisis to recovery to turn the page on an era of irresponsibility and to adopt a set of policies, regulations and reforms to meet the needs of the 21st century global economy.
More precisely, they propose
strengthening prudential oversight, improving risk management, strengthening transparency, promoting market integrity, establishing supervisory colleges, and reinforcing international cooperation.
enhanced and expanded the scope of regulation and oversight, with tougher regulation of over-the-counter (OTC) derivatives.
G20 leaders have decided that:
All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements. We ask the Financial Stability Board (FSB) and its relevant members to assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.
These decisions were implemented by the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act’’), July 21, 2010, in the United States, and by the European Market Infrastructure Regulation (EMIR), July 4, 2012, in Europe. EMIR was a major development which enabled the European Union to deliver the G20 commitments on OTC derivatives agreed in Pittsburgh in September 2009, nearly two years after the US.
Swap data repositories (SDRs) are entities created by the Dodd-Frank Act in order to provide a central facility for swap data reporting and recordkeeping. Under the Dodd-Frank Act, all swaps, whether cleared or uncleared, are required to be reported to registered SDRs. SDRs are required to register with the Commodity Futures Trading Commission (CFTC) and comply with rules promulgated by the CFTC, including real-time public reporting of swap transaction and pricing data. These electronic platforms, acting as authoritative registries of key information regarding open OTC derivatives trades, are thought to provide an effective tool for mitigating the inherent opacity of OTC derivatives markets. Several firms are currently registered as SDRs in the US, and in Europe as Trade Repositories.
Concretely, they are database of transaction data. For Credit Default Swaps indices, the OTCStreaming project gives for free this information in order to increase the transparency on the credit derivatives markets.