GTR MAS Delegation Code of Practice - DTCC/media/Files/Downloads/Data-and... · 2014-06-19 ·...
Transcript of GTR MAS Delegation Code of Practice - DTCC/media/Files/Downloads/Data-and... · 2014-06-19 ·...
© DTCC
GTR MAS Delegation Code of Practice Guide for Firms Offering Delegation Service
Last Updated: 10 June 2014
© DTCC
Structure
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Topic Page
I. Background ……………………..………………………………………… 3 II. Scope & Requirements ...……………………………………………….. 4 III. Counterparty Delegation ……………………….................................. 5
– Account Setup …………………………………………………………………… 5 – Submitted for ‘BOTH’ …………………………………………………………… 6 – Submitted for ‘Party 2’ …………………………………………………………. 8 – Multijurisdictional Reporting ………………………………………………….. 10
IV. Third Party Delegation ………………………………………………….. 14 – Account Setup ……………………………………………………………………. 14 – Submitted for ‘Party 1’ …………………………………………………………… 15 – Submitted for ‘BOTH’ …………………………………………………………….. 17 – Multijurisdictional Reporting …………………………………………………… 19
V. Test Cases ……………………………………………………………........ 20
© DTCC
Background
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Background
Under MAS regulations all OTC trades must be reported to a trade repository. The reporting obligation for 2014 covers Interest Rate and Credit Derivatives asset classes. DTCC provides a number of simple reporting options for compliance with MAS reporting requirements.
DTCC offers a centralized and flexible trade reporting solution for participants looking to meet their reporting obligations under MAS. Firms can submit and reconcile their trades directly in DTCC’s trade repository. Alternatively they can delegate their reporting to their counterparty or a third party, who in turn, will report to DTCC.
For avoidance of doubt, throughout this document, the following definitions would be used to identify the two delegation models supported for MAS reporting:
Counterparty Delegation: a firm delegates their reporting to the counterparty of the trade E.g.: Trade Party 1 would submit on behalf of Trade Party 1 and Trade Party 2 or Trade Party 2 only (as Trade Party 1 may not have the reporting obligation)
Third Party Delegation: a firm delegates their reporting to a third party
This document is meant to be a guide for firms planning on delegating and/or offering the delegation service. For firms planning on offering the delegation service, it should be noted that buyside delegation differs from sellside delegation. Buyside delegation involves additional field(s) to be included in the submission. Firms planning on offering the delegation service should factor this in to their plans (built and testing).
DTCC strongly encourages all parties to thoroughly test, at the very least, the scenarios highlighted in the ‘test scenario’ part of the document, before moving to the Production environment.
© DTCC
Scope & Requirements
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Document Scope
This document details how Counterparty Delegation and Third Party Delegation would work for MAS Phase 1 reporting
The requirements outlined in this document serves to be a supplement to the Cross Asset Global Trade Repository BRD, Interest Rates GTR BRD, Credit GTR BRD and MAS Reporting BRD
Firms planning on delegating their reporting should refer to slides 5-7. Firms planning on offering the delegation service should review the entire pack
Onboarding Requirements
All parties (the delegated party, the counterparty, the asset/investment manager and the third party) would need to have a DTCC account
Parties with the Reporting Obligation would need to be on-boarded to DDRS (DTCC Data Repository (Singapore) Pte. Ltd.)
Out of Scope
Partial Delegation - For avoidance of doubt, there is no distinction between Full and/or Partial delegation for the MAS delegation model. The party performing the delegated service would need to include all the relevant MAS reportable fields in their submission to the GTR
Counterparty Reference Data and Enrichment (CRDE) – This is the enrichment service provided to firms in order to facilitate the need of submitting their Counterparty Reference Data which is not required for MAS Phase 1 reporting.
© DTCC
Counterparty Delegation: Account Setup
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All firms that have MAS Reporting Obligation would need to be on-boarded to DDRS
For firms performing the Delegated Service
– Firms would need to have an active DTCC account – The “Delegated Service Election” field contained in the Service Request Form must be
set to “Yes” to allow Delegated Reporting functionality to be setup. – Firms must check this account setup with the Onboarding team
For firms delegating the reporting to their counterparty
– Firms would need to be fully on-boarded to DDRS – No additional account setup required
If the firm performing the Delegated Service reports on behalf of their counterparty who is not on-boarded to DDRS
– Submission would appear in their Warning Report – Delegated submission on behalf of the counterparty would not be sent to MAS
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2
4
3
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Counterparty Delegation: Submitted for ‘BOTH’
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Outbound Submission to DTCC
Scenario 1: For the firm performing the delegated service, thus submitting on behalf of their buyside counterparty, where both Party 1 and Party 2 has the Reporting Obligation under MAS
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer BOTH Dealer Counterparty Asset Manager MAS MAS
From the Counterparty’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment / REIT Manager. As such, the Dealer would need to include the Execution Agent details in the ‘Execution Agent Party 2’ field.
If the ‘Execution Agent Party 2’ field is not included in the Dealer’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
Assumption
Firm performing the Delegated Service = Dealer
Party delegating reporting = Counterparty*
Execution Agent of delegated party = Asset Manager**
Both Dealer and Counterparty have Reporting Obligations against MAS
All parties (Dealer, Counterparty and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
© DTCC
Counterparty Delegation: Submitted for ‘BOTH’
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report
Dealer’s Reports
Counterparty’s Reports
Asset Manager’s Reports
From the Regulator’s point of view, they would see the following
MAS Regulator Report
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer’s Reporting Dealer Dealer Dealer Counterparty Asset
Manager MAS MAS
Counterparty’s Reporting Dealer Counterparty Dealer Counterparty Asset
Manager MAS MAS
© DTCC
Counterparty Delegation: Submitted for ‘Party 2’
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Outbound Submission to DTCC
Scenario 2: For the firm performing the delegated service, thus submitting on behalf of their buyside counterparty, where only their buyside counterparty has the Reporting Obligation under MAS
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer Counterparty Dealer Counterparty Asset Manager MAS
From the Counterparty’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment / REIT Manager. As such, the Dealer would need to include the Execution Agent details in the ‘Execution Agent Party 2’ field.
If the ‘Execution Agent Party 2’ field is not included in the Dealer’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
Assumption
Firm performing the Delegated Service = Dealer
Party delegating reporting = Counterparty*
Execution Agent of delegated party = Asset Manager**
Only Counterparty has Reporting Obligations against MAS
All parties (Dealer, Counterparty and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
© DTCC
Counterparty Delegation: Submitted for ‘Party 2’
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report
Dealer’s Reports (only counterparty’s side of trade)
Counterparty’s Reports
Asset Manager’s Reports
From the Regulator’s point of view, they would see the following
MAS Regulator Report
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Counterparty’s Reporting Dealer Counterparty Dealer Counterparty Asset
Manager MAS
© DTCC
Counterparty Delegation: Multijurisdictional Reporting
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Outbound Submission to DTCC
Scenario 3: For the firm performing the delegated service, thus submitting on behalf of their counterparty, where only Party 1 has the reporting obligation under multiple jurisdictions, and Party 2 (the buyside counterparty) has the reporting obligation under MAS
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer BOTH Dealer Counterparty Asset Manager “ESMA;MAS” MAS
Assumption
Firm performing the Delegated Service = Dealer
Party delegating reporting = Counterparty*
Execution Agent of delegated party = Asset Manager**
Dealer’s reporting obligation = ESMA and MAS
Counterparty’s reporting obligation = MAS
All parties (Dealer, Counterparty and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
The Delegated Service Election switch is set according to asset class per account, not by jurisdiction
For multi jurisdiction reporting, the party performing the delegated service can specify the regulator(s) they would like the trade to be reported to for themselves and their counterparty through the Party 1 and Party 2 Reporting Obligation fields
© DTCC
Counterparty Delegation: Multijurisdictional Reporting
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report Dealer’s Reports Counterparty’s Reports Asset Manager’s Reports
From the Regulator’s point of view, they would see the following
MAS Regulator Report
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer’s Reporting Dealer Dealer Dealer Counterparty Asset
Manager MAS MAS
Counterparty’s Reporting Dealer Counterparty Dealer Counterparty Asset
Manager MAS MAS
From the Counterparty’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment Manager. As such, the Dealer would need to include the Execution Agent details in the ‘Execution Agent Party 2’ field.
If the ‘Execution Agent Party 2’ field is not included in the Dealer’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
© DTCC
Counterparty Delegation: Multijurisdictional Reporting
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Outbound Submission to DTCC
Scenario 4: For the firm performing the delegated service, thus submitting on behalf of their buyside counterparty, where BOTH Party 1 and Party 2 has multijurisdictional reporting (for ESMA and MAS)
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer BOTH Dealer Counterparty Asset Manager “ESMA;MAS” “ESMA;MAS”
Assumption
Firm performing the Delegated Service = Dealer
Party delegating reporting = Counterparty*
Execution Agent of delegated party = Asset Manager**
Dealer’s reporting obligation = ESMA and MAS
Counterparty’s reporting obligation = ESMA and MAS
All parties (Dealer, Counterparty and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
The party performing the delegated service can also perform multijurisdictional delegated reporting for their client, if required
Both ESMA and MAS would see the above submission as delegated reporting
© DTCC
Counterparty Delegation: Multijurisdictional Reporting
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report Dealer’s Reports Counterparty’s Reports Asset Manager’s Reports
From the Regulator’s point of view, they would see the following
MAS Regulator Report
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Dealer’s Reporting Dealer Dealer Dealer Counterparty Asset
Manager MAS MAS
Counterparty’s Reporting Dealer Counterparty Dealer Counterparty Asset
Manager MAS MAS
From the Counterparty’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment Manager. As such, the Dealer would need to include the Execution Agent details in the ‘Execution Agent Party 2’ field.
If the ‘Execution Agent Party 2’ field is not included in the Dealer’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
© DTCC
Third Party Delegation: Account Setup
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All firms with MAS Reporting Obligation would need to be on-boarded to DDRS
For vendors performing the Third Party Delegation
– Vendors would need to be connected to DTCC – If not connected, vendors should contact the DerivServ Provider Relations team
([email protected]) for Third Party Onboarding details
For firms that would be using a Third Party
– Firms would need to be fully on-boarded to DDRS – Firms would need to sign an additional document (DDRS Third Party Submitter
Authorization Supplement) to authorize the Third Party to submit trades on its behalf – Once the documentation has been completed, the Third Party account and the firms’
accounts would be mapped accordingly – Please contact the Onboarding team ([email protected]) for more details on
the onboarding process
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Third Party Delegation: Submitted for ‘Party 1’
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Outbound Submission to DTCC
Scenario 5: For vendors performing the third party service, thus submitting on behalf of their buyside client
From the Client’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment Manager, and not the party of the trade. As such, the Third Party would need to include the Execution Agent details in the ‘Execution Agent Party 1’ field.
If the ‘Execution Agent Party 1’ field is not included in the Third Party’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
Assumption
Vendor performing the Third Party Service = Third Party
Client delegated reporting to Third Party= Client*
Execution Agent of delegated party = Asset Manager**
Counterparty of the trade = Counterparty
Asset Manager has Reporting Obligations against MAS
All parties (Third Party, Client, Counterparty and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 1
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Third Party Client Client Counterparty Asset Manager MAS
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Third Party Delegation: Submitted for ‘Party 1’
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report
Third Party’s Reports
Client’s Report
Asset Manager’s Reports
Counterparty’s Reports (only counterparty’s side of trade)
From the Regulator’s point of view, they would see the following
MAS Regulator Report
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 1
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Client’s Reporting Third Party Client Client Counterparty Asset
Manager MAS
© DTCC
Third Party Delegation: Submitted for ‘BOTH’
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Outbound Submission to DTCC
Scenario 6: For vendors performing the third party service, and submitting on behalf of both parties of the trade
Assumption
Vendor performing the Third Party Service = Third Party
Client delegated reporting to Third Party= Client 1 & Client 2*
Execution Agent of delegated party = Asset Manager** (assuming for Client 2)
Both Client 1 and Asset Manager have Reporting Obligations against MAS
All parties (Third Party, Client 1, Client 2 and Asset Manager) have an active DTCC account
* from a buyside perspective, this could be a fund or a trustee ** from a buyside perspective, this could be an Asset Manager, an Investment Manager, or a REIT Manager
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 1
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Third Party BOTH Client 1 Client 2 Asset Manager MAS MAS
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 1
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Third Party Client 1 Client 1 Client 2 Asset Manager MAS
Third Party Client 2 Client 2 Client 1 Asset Manager MAS
or
© DTCC
Third Party Delegation: Submitted for ‘BOTH’
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Expectation on Participant Reports
Submissions Report Activity Report Enhanced Position Report
Third Party’s Reports Client’s Report Asset Manager’s Reports Counterparty’s Reports
From the Regulator’s point of view, they would see the following
MAS Regulator Report
From the Client’s perspective, the Party who has the Reporting Obligation under MAS might be the Asset / Investment Manager, and not the party of the trade. As such, the Third Party would need to include the Execution Agent details in the ‘Execution Agent Party 1’ field.
If the ‘Execution Agent Party 1’ field is not included in the Third Party’s submission, the Asset Manager would be out of compliance and would not be able to view the position submission.
Data Submitter
Submitted For
Trade Party 1
Trade Party 2
Execution Agent Party 1
Execution Agent Party 2
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Client’ 1s Reporting Third Party Client 1 Client 1 Client 2 Asset
Manager MAS
Client 2’s Reporting Third Party Client 2 Client 2 Client 1 Asset
Manager MAS
© DTCC
Third Party Delegation: Multijurisdictional Reporting
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Third Party Delegation can be performed for multijurisdictional reporting
For multi jurisdiction reporting, the third party performing the delegated service can specify the regulator(s) they would like the trade to be reported to for their clients through the Party 1 and Party 2 Reporting Obligation fields
Firms that would be delegating their reporting to a third party for any other jurisdictions would need to ensure the appropriate documentation is in place for each respective jurisdiction
For further clarification on the documentation required for other jurisdictions, please contact the GTR Onboarding team ([email protected])
© DTCC
Test Cases – Counterparty Delegation
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Test Case Party MAS
‘Specified Person’
DTCC Submission Field
DTCC Account Setup
Participant Report
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Report Expected Results
Counterparty Delegation: Party 1 (Dealer) performs delegated reporting for both Party 1 (Dealer) and Party 2 (Buyside Fund)
Party 1 MAS MAS Delegated Service Election = YES Account fully onboarded to DDRS for MAS Reporting
Submission Report Activity Report Enhanced Position Report
Party 2 (Fund) No MAS MAS Account fully onboarded to DDRS for MAS Reporting
Submission Report
Activity Report Enhanced Position Report
Execution Agent (Asset Manager)
Party 2
Account fully onboarded to DDRS for MAS Reporting
Submission Report
Activity Report Enhanced Position Report
Counterparty Delegation: Party 1 (Dealer) perfoms delegated reporting for Party 2 (Buyside Fund) only
Party 1 No MAS Actively connected to DTCC Delegated Service Election = YES
Submission Report Activity Report Enhanced Position Report
Party 2 (Fund) No
MAS Account fully onboarded to DDRS for MAS Reporting
Submission Report
Activity Report Enhanced Position Report
Execution Agent (Asset Manager)
Party 2
Account fully onboarded to DDRS for MAS Reporting
Submission Report
Activity Report Enhanced Position Report
© DTCC
Test Case Party MAS
‘Specified Person’
DTCC Submission Field
DTCC Account Setup
Participant Report
Trade Party 1 Reporting Obligation
Trade Party 2 Reporting Obligation
Report Expected Results
Third Party Delegation: Third Party (Vendor) performs third party delegation for Party 1 (Buyside Fund) only
Third Party
No Actively connected to DTCC Mapping completed against Party 1 account
Submission Report Activity Report Enhanced Position Report
Party 1 MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account
Submission Report Activity Report Enhanced Position Report
Party 2 (Fund) No Account does not have to be onboarded to DTCC
Submission Report Activity Report Enhanced Position Report
Execution Agent (Asset Manager)
Party 1
No Account fully onboarded to DDRS for MAS Reporting
Submission Report Activity Report Enhanced Position Report
Third Party Delegation: Third Party (Vendor) performs third party delegation for Party 1 and Party 2 (Buyside Fund)
Third Party No Actively connected to DTCC Mapping completed against Party 1 and Party 2 account
Submission Report Activity Report Enhanced Position Report
Party 1 MAS MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account
Submission Report Activity Report Enhanced Position Report
Party 2 (Fund) MAS MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account
Submission Report Activity Report Enhanced Position Report
Execution Agent (Asset Manager)
Party 2
Account fully onboarded to DDRS for MAS Reporting
Submission Report Activity Report Enhanced Position Report
Test Cases – Third Party Delegation
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