ESMA slaps €408,000 penalty on derivatives firm due to EMIR data breaches

The European Securities and Markets Authority (ESMA) has fined DTCC Derivatives Repository for seven breaches of the European Market Infrastructure Regulation (EMIR).

DTCC Derivatives Repository is a trade repository that offers a suite of post-trade record-keeping and reporting services for over-the-counter equity, credit and interest rates derivatives.

The ESMA noted the repository made seven infringements of the EMIR law including data confidentiality, direct and immediate access to data and data integrity.

According to the authority, 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 and the failure of DTCC to provide regulators with direct and immediate access to relevant data.

The ESMA detailed that the DDRL failed to provide direct and immediate access to regulators by generating reports for regulators containing incorrect data, failing to give certain regulators transaction data they were entitled to receive in line with their mandates and failing to provide regulators with all transaction data regarding OTC derivatives contracts that were opened and exited and cancelled or matured on the same day.

The breaches were committed between 2014 and 2018 and were identified to have resulted from negligence due to DDRL.

The ESMA stated that this was the first time it had found breaches in relation to a trade repository’s obligation to ensure confidentiality and integrity of reported EMIR data.

ESMA interim chair Anneli Tuominen 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.”

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