ESMA Fines DTCC Derivatives Repository €408,000 for EMIR Violations

The European Securities and Markets Authority (ESMA) has fined DTCC Derivatives Repository Plc (DDRL) a total of €408,000 for seven infringements of the EMIR rules regarding data confidentiality, data integrity, and direct and immediate access to data.

The breaches were committed between 2014 and 2018 and were found to have resulted from negligence on the part of DDRL.

Anneli Tuominen, ESMA’s Interim Chair, said: “Today’s action against DDRL emphasises the importance ESMA places on trade repositories complying with their obligations on data confidentiality, integrity and access.

“The provision of timely, accurate and confidential data to CCP and derivatives markets supervisors is an essential requirement in facilitating the monitoring and identification of systemic risk in EU derivatives markets. ESMA will continue to monitor this area and take the necessary action to promote stable and orderly financial markets.”

Provides for the protection of the confidentiality and integrity of data received by trade repositories (TRs), EMIR requires TRs to provide such data to regulators to improve transparency and facilitate the monitoring of systemic risks in derivatives markets.

The breaches relate to granting certain asset managers access to data that they were not entitled to receive; setting up its IT system in a way that altered the substance of certain information reported to DDRL, and failing to provide regulators with direct and immediate access to relevant data.

This was the first time ESMA found breaches in relation to a TR’s obligation to ensure the confidentiality and the integrity of the data reported under EMIR.

DTCC Derivatives Repository failed to provide direct and immediate access to regulators by generating reports for regulators containing incorrect data, failing to provide certain regulators with transaction data they were entitled to receive in line with their responsibilities and mandates, and failing to provide regulators with all transaction data regarding OTC derivatives contracts that were opened and exited, canceled or matured on the same day.

ESMA considered both aggravating and mitigating factors provided for in EMIR when calculating the fine that amounts to €408,000. DDRL may still appeal against this decision and ask to suspend the application of the decision.