European Swaps Regulation - OTC Derivatives Reporting - Comment Letter - Deutsche Bank - April 14, 2010
Guidance to Report Transactions on OTC Derivative Instruments - CESR
April 14, 2010
In this comment letter, Deutsche Bank responds to CESR's consultation paper regarding transaction reporting for European OTC derivative instruments. In general Deutsche Bank agreed with CESR's analysis and recommendations proposed in the consultation paper, though there were several main areas where they proposed adjustments:
- The Markit RED code has an advantage over the Bond ISIN as a method for identifying the reference obligation of a CDS trade. Consideration of the benefits of the RED code should be weighed against the required system changes for those firms currently reporting the Bond ISIN to the UK FSA.
- To ensure accurate but flexible reporting, any definition of a "complex derivative" should avoid being overly prescriptive. This should allow reporting firms to self-identify those trades that they consider complex.
- If business events are to be included, then both amendments and terminations should be reported.
- The proposed methodology to report equity swaps with two equity legs may lack feasibility due to data validation issues.