gtr mas delegation code of practice/media/files/downloads/data-and-repository-services/gtr... ·...

© DTCC

GTR MAS Delegation Code of Practice Guide for Firms Offering Delegation Service

Last Updated: 10 June 2014

© DTCC

Structure

2

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

3

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

4

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

5

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

([email protected])

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

1

2

4

3

mailto:[email protected]

© DTCC

Counterparty Delegation: Submitted for ‘BOTH’

6

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


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’

7

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




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’

8


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




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.


Assumption




Only Counterparty has Reporting Obligations against MAS



© DTCC

Counterparty Delegation: Submitted for ‘Party 2’

9



Dealer’s Reports (only counterparty’s side of trade)

Counterparty’s Reports




Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Manager MAS

© DTCC

Counterparty Delegation: Multijurisdictional Reporting

10


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




Dealer BOTH Dealer Counterparty Asset Manager “ESMA;MAS” MAS

Assumption




Dealer’s reporting obligation = ESMA and MAS

Counterparty’s reporting obligation = MAS



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


11


Submissions Report Activity Report Enhanced Position Report Dealer’s Reports Counterparty’s Reports Asset Manager’s Reports



Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Manager MAS MAS


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.


© DTCC


12


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




Dealer BOTH Dealer Counterparty Asset Manager “ESMA;MAS” “ESMA;MAS”

Assumption




Dealer’s reporting obligation = ESMA and MAS

Counterparty’s reporting obligation = ESMA and MAS



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


13


Submissions Report Activity Report Enhanced Position Report Dealer’s Reports Counterparty’s Reports Asset Manager’s Reports



Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Manager MAS MAS


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.


© DTCC

Third Party Delegation: Account Setup

14

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

1

2

3



© DTCC

Third Party Delegation: Submitted for ‘Party 1’

15


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*


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


Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Third Party Client Client Counterparty Asset Manager MAS

© DTCC

Third Party Delegation: Submitted for ‘Party 1’

16



Third Party’s Reports

Client’s Report


Counterparty’s Reports (only counterparty’s side of trade)



Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Client’s Reporting Third Party Client Client Counterparty Asset

Manager MAS

© DTCC

Third Party Delegation: Submitted for ‘BOTH’

17


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


Data Submitter

Submitted For

Trade Party 1

Trade Party 2





Third Party BOTH Client 1 Client 2 Asset Manager MAS MAS

Data Submitter

Submitted For

Trade Party 1

Trade Party 2





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’

18



Third Party’s Reports Client’s Report Asset Manager’s Reports Counterparty’s Reports



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





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

19

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

20

Test Case Party MAS

‘Specified Person’

DTCC Submission Field

DTCC Account Setup

Participant Report



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


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


Party 2 (Fund) No

MAS Account fully onboarded to DDRS for MAS Reporting

Submission Report



Party 2


Submission Report


© DTCC

Test Case Party MAS

‘Specified Person’

DTCC Submission Field

DTCC Account Setup

Participant Report



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


Party 1 MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account


Party 2 (Fund) No Account does not have to be onboarded to DTCC



Party 1

No Account fully onboarded to DDRS for MAS Reporting


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


Party 1 MAS MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account


Party 2 (Fund) MAS MAS Account fully onboarded to DDRS for MAS Reporting Mapping completed against Third Party account



Party 2



Test Cases – Third Party Delegation

21

gtr mas delegation code of practice/media/files/downloads/data-and-repository-services/gtr... ·...

Documents