Clarification on reporting of transactions related to OTC clearing on standard contracts registered at the exchange. Should the exchange report these transactions even though the volume and price related to the registered cleared transaction could not be necessarily related to a unique transaction executed on broker platform?
1) Market participant A executes on a broker platform a transaction with market participant B for a volume V1 and price P1 on day 15th of August.
2) On 17 August market participant A execute another transaction on a broker platform with the same market participant B for a volume V2 and price P2.
3) On 20 August Market participant A registers at exchange for clearing purpose a OTC transaction with market participant B for volume V=V1+V2 at price P (potentially different from P1 or P2).
We believe transactions registered at exchanges related to OTC clearing should not be reported to ACER, as the clearing could be referred to cumulated volumes and a price chosen by market participants and hence do not provide useful elements for market monitoring. Furthermore, such reporting could lead to a double reporting of the same transactions from two different parties (i.e. broker platform and the exchange).
From the above question, we understand that there are three separate transactions:
1) on 15 August volume V1 and price P1: trade to be reported indicating the broker OMP ID;
2) on 17 August volume V2 and price P2: trade to be reported indicating the broker OMP ID;
3) on 20 August the above transactions (V=V1+V2 at price P) are cleared at the exchange based on the new single transaction (V=V1+V2 at price P). The cleared trade is expected to be reported to ACER as a trade on exchange (i.e. indicating the exchange OMP ID in Data Field (27) in Table 1).
When the clearing occurs, the two individual transactions reported (indicated in point 1 and 2) shall not be cancelled with Action type ‘C’ in the ACER reporting.