March 23, 2010 / 9:57 PM / in 8 years

DTCC to give regulators direct access to CDS data

NEW YORK, March 23 (Reuters) - The Depository Trust & Clearing Corp said on Tuesday that it plans to give regulators direct access to credit default swap information held in its warehouse, including data specific to a trade counterparty’s positions.

Legislators internationally are working on rules to regulate the $450 trillion privately traded derivatives markets and want regulators to have access to trade information in the markets, including positions held by large counterparties.

The move comes after insurer American International Group (AIG.N) needed a government bailout from selling billions of dollars of protection on risky assets using CDSs, and didn’t have adequate capital to back the exposures.

The DTCC holds data on around 2.3 million credit default swap contracts from trade counterparties located in 52 countries, it said in a release on Tuesday.

The company said it is developing protocols to give regulators direct access to this data.

“It is a bedrock principle of the Warehouse that all interested regulators should have unfettered access to Warehouse information necessary in furtherance of their respective regulatory missions,” the DTCC said.

The DTCC said it has provided data to regulators when requested; however, in some cases it has refrained from providing specific counterparty information without the consent of the counterparty in order to protect proprietary information.

“In light of recent developments, we believe that responding to these requests while continuing to observe the practice of not providing counterparty names absent consent may no longer be appropriate,” the DTCC said.

Going forward, detail on a counterparty’s aggregate exposure and trade-level information will be provided to regulators that have a material interest in that information, the DTCC said.

Reporting by Karen Brettell; Editing by Kenneth Barry

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