From the Regulators

IOSCO, CPMI seek comments on consultative report

By James Langton |

Global policymakers have issued a report on efforts to standardize the data reported on over-the-counter (OTC) derivatives trades so that regulators can develop a comprehensive view of the market.

The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) published a consultation report on Wednesday as part of their ongoing efforts at developing guidance for harmonizing data reported on the OTC derivatives markets.

G20 leaders agreed in 2009 to require that OTC derivatives contracts be reported to trade repositories as part of global reforms designed to enhance transparency, mitigate systemic risk, and protect against market abuse. Various jurisdictions, including Canada, have begun adopting this sort of reporting; but, to get a comprehensive look at the markets and the trading activity, policymakers say that it's necessary to aggregate the data reported to various trade repositories. To that end, they are looking to standardize certain information so that it can easily be combined to create holistic view of the markets.

The Financial Stability Board (FSB) has asked IOSCO and the CPMI to develop global guidance on the harmonization of the data that's being reported to repositories, including Unique Transaction Identifiers (UTIs) and Unique Product Identifiers (UPIs). The consultative report issued today focuses on the development of a harmonized global UTI, which would uniquely identify each OTC derivative transaction that must be reported to trade repositories. The ultimate objective is to produce clear guidance as to the definition, format and usage of a UTI that enables the consistent global aggregation of OTC derivatives transaction data.

Additionally, IOSCO and the CPMI also plan to issue a report on the harmonization of a first batch of key OTC derivatives data elements, other than UTIs and UPIs, that are needed to meaningfully aggregate data on OTC derivatives transactions on a global basis.

The regulators are seeking comments on the consultative report by Sept. 30.