DTCC has introduced a new service offering real-time access to over-the-counter (OTC) derivatives transaction data through cloud technology. Dubbed OTC Direct Connect, the new offering caters to investment professionals, data vendors, and business support teams operating in the derivatives markets.

According to the company’s official statement, OTC Direct Connect aims to streamline the management of market and trading risk factors. It offers a solution to eliminate manual data collection methods. The service promises improved transparency in the OTC derivatives markets, in line with regulatory disclosure mandates.

Tim Lind, the Managing Director of DTCC Data Services, mentioned: “This solution systematically and seamlessly disseminates OTC derivatives transaction data to interested parties. OTC Direct Connect improves transparency in the OTC derivatives markets, as intended by regulatory disclosure mandates, by providing subscribers with improved information access.”

The Future of OTC Derivatives Management?

DTCC's OTC Direct Connect aims to transform the handling of OTC derivatives transactions. It equips subscribers with real-time access to crucial market data, enabling them to manage risks associated with trading activities better. The elimination of manual data collection methods is a significant benefit, providing scalability and automated access to DTCC’s published data on the Public Price Dissemination Dashboard.

We have launched a new service, OTC Direct Connect, that will leverage cloud technology and streamline access to OTC derivatives transactions data to help eliminate manual data collection methods.

Read more: https://t.co/jEax5clcRi pic.twitter.com/iPBWzujOrU

— DTCC (@The_DTCC) November 8, 2023

Besides that, the service improves market transparency as required by regulatory disclosure mandates, providing subscribers with enhanced information access. Subscribers receive data through Amazon Web Services (AWS) via AWS Data Exchange. This allows them to conveniently find, subscribe to, and use third-party data in the cloud.

AWS Data Exchange's integration with other AWS services, such as Amazon S3, Amazon Athena, and Amazon Redshift, streamlines data storage and integration into their systems and applications. The launch of OTC Direct Connect adds to the array of DTCC Data Services offerings, reinforcing DTCC's commitment to providing reliable and innovative solutions to the financial services industry.

Evolving Landscape of OTC Derivatives Regulation

The regulation of OTC derivatives is gaining traction globally. In September, the Canadian securities regulatory authorities introduced a comprehensive rule to regulate OTC derivatives for dealers and advisers. This new rule, aligning with international standards, aims to foster transparency, accountability, and ethical practices in the OTC derivatives market in Canada.

The newly adopted rule places substantial responsibilities on OTC derivatives dealers and advisers. These obligations include mandates related to fair dealing, conflict of interest management, reporting non-compliance, and maintaining meticulous recordkeeping. This framework is a crucial step towards ensuring the integrity of the OTC derivatives market.