Securities Law & Instruments


Headnote

DTCC Data Repository (U.S.) LLC – OSC Rule 91-507 – derivatives trade reporting obligations – applicant seeking relief from requirements to publicly disseminate transaction level data 48 hours from the execution time stamp – relief granted, subject to conditions.

DIRECTOR’S EXEMPTION

IN THE MATTER OF
DTCC DATA REPOSITORY (U.S.) LLC

DECISION
(Section 42 of Ontario Securities Commission Rule 91-507 Trade Repositories and Derivatives Data Reporting)

                WHEREAS DTCC Data Repository (U.S.) LLC (the “Applicant”) is a designated trade repository pursuant to an order under section 21.2.2 of the Securities Act (Ontario) (the “Act”) dated September 19, 2014 (the “Designation Order”) and therefore the Applicant, as a designated trade repository, is subject to obligations under Ontario Securities Commission (“OSC” or the “Commission”) Rule 91-507 Trade Repositories and Derivatives Data Reporting (“OSC Rule 91-507”);

                AND UPON the application of the Applicant to the Director (as such term is defined in section 1 of the Act) for an order pursuant to section 42 of OSC Rule 91-507 exempting the Applicant from the requirements under subsection 39(3) and item 7 of Appendix C of OSC Rule 91-507 for a designated trade repository to publicly disseminate prescribed transaction-level data for certain derivatives, 48 hours after the time and date represented by the execution timestamp field of the transaction (the “48-Hour Dissemination Requirement”);

                AND UPON the Applicant having represented to the Director that:

1.             the Applicant is a limited liability company organized under the laws of New York;

2.             the Applicant provides trade repository services in Ontario pursuant to the Designation Order and is subject to requirements and obligations applicable to designated trade repositories under OSC Rule 91-507 and to the terms and conditions that are set out in Schedule "A" of the Designation Order;

3.             the Applicant accepts derivatives transaction data required to be reported under the OSC Rule 91-507 for credit, equity, interest rate, commodity and foreign exchange asset classes;

4.             as prescribed in Appendix C to OSC Rule 91-507, the Applicant is required to publicly disseminate transaction-level data for certain derivatives (the “Disseminated Transactions”) in compliance with the 48-Hour Dissemination Requirement;

5.             in order to publicly disseminate the Disseminated Transactions and comply with the 48-Hour Dissemination Requirement, the Applicant relies on technology infrastructure and resources (the “Applicant’s Systems”); 

6.             the Applicant’s Systems, including the technology infrastructure and resources used to publicly disseminate the Disseminated Transactions, require certain periods of non-operation or downtime (“System Downtime”) to comply with system and operational risk control requirements as well as to allow for regular operational maintenance, major system upgrades and system repairs, disaster recovery exercises and exercises related to regulatory obligations all of which are necessary for operating the Applicant’s trade repository services in accordance with safe industry standard practices meant to reduce risk to its operations;

7.             there are eight consecutive hours of System Downtime scheduled each week, starting at 10:00 pm ET on Saturday until 6:00 am ET on Sunday affecting the Applicant’s Systems;

8.             System Downtime can also occur on an ad hoc basis; and

9.             as a consequence of both scheduled and ad hoc System Downtime, the Applicant is from time to time unable to comply with the 48-Hour Dissemination Requirement for certain Disseminated Transactions;

                AND UPON the Director being satisfied that exempting the Applicant from the 48-Hour Dissemination Requirement would not be prejudicial to the public interest;

                IT IS THE DECISION of the Director that pursuant to section 42 of OSC Rule 91-507, the Applicant is exempted from the 48-Hour Dissemination Requirement when the Applicant is prevented from publicly disseminating a Disseminated Transaction in accordance with the 48-Hour Dissemination Requirement as a direct consequence of System Downtime (the “Exemption”);

                PROVIDED THAT:

1.             the Applicant publicly disseminates each Disseminated Transaction that was not publicly disseminated in accordance with the 48-Hour Dissemination Requirement as a direct consequence of System Downtime as soon as practicable following the conclusion of the period of System Downtime that prevented public dissemination of the Disseminated Transaction in accordance with the 48-Hour Dissemination Requirement;

2.             beginning in 2018, on the last business day in March of each year, the Applicant provides the Director with an annual written report:

(a)           detailing, on a monthly basis for the preceding 12 months and segregated by asset class, (i) the number of Disseminated Trades that have been delayed from being publicly disseminated in accordance with the 48-Hour Dissemination Requirement and (ii) the average length of the delays  that resulted from System Downtime; and

(b)           describing how the Applicant is working to optimize the Applicant’s Systems and reduce System Downtime including a description of the impact of any changes made to the Applicant’s Systems on the number of Disseminated Transactions delayed from being publicly disseminated in accordance with the 48-Hour Dissemination Requirement; and

3.             the Exemption expires five years after the date of this decision.

                DATED February 9, 2017

“Kevin Fine”
Director, Derivatives Branch
Ontario Securities Commission