The European Securities and Markets Authority (ESMA) on Monday issued final regulatory guidance setting out the operational standards for aggregating and comparing position data across trade repositories, which the regulators note “is important to assess risks associated to those markets.”
The standards are designed to ensure that the market activity in derivatives that are traded both on and off an exchange, is correctly identified and aggregated.
The guidance also includes requirements intended to enhance the quality of data that is publicly reported, and to allow the publication of certain aggregated figures under European regulations.
Among other things, the guidance sets requirements for: the frequency and timeliness of publication; the technical elements of data aggregation; and, measures to avoid double counting, given that derivatives contracts are required to be reported from both sides of a trade.
The European Commission has three months to decide whether or not to endorse the proposed new standards.