Dodd Frank | GO! Get Set, On Your Marks

It’s been a while since we’ve posted.   And there is a reason for that. Dodd-Frank is finally coming to town.  With the final rule for Market Classification hitting the Fed Reg on May 23d, and the final Swaps Definition hitting the deck today…. the clock has started ticking.

In the commodities business it is shaping up to be a 2 horse race for SDRs.  But before we get to that, I think it is important that everyone knows who has Dodd Frank SDR obligations.  Does your company trade?  If the answer is “Yes,”  I hate to be the bearer of bad news, but you’ve got DF obligations.  If that trading includes non-cleared OTC deals, then not only do you have DF obligations, but you are going to have to regularly submit your trades to a Swaps Data Repository (SDR).

The two horse race is between ICE Trade Vault and DTCC.  I’ll be honest that for commodities we are slightly in favor of ICE as a compliance solution for commodities trades submission.   Trade Vault is really built on the back of eConfirm.  Many are used to this functionality and the API is pretty well developed.  But most of all, ICE has a lot of experience with commodities.  DTCC not so much.   Trade Vault has some very straightforward manual upload capabilities if your organization is behind automated compliance.

But getting trades into the SDR has never been the issue.   The issue is getting trades out of the ETRM systems. Stay tuned for more on this as it is really what clients are struggling with.