The Derivatives Service Bureau will be the sole issuer of UPI codes and operate the UPI reference data library, facilitating the use of OTC trade reporting data in assessing systemic risk.
The FSB (Financial Stability Board) has announced the designation of DSB Ltd (The Derivatives Service Bureau Ltd), a UK registered numbering agency and subsidiary of ANNA (the Association of National Numbering Agencies), as the service provider for the future UPI (Unique Product Identifier) system.
This is a key step in completing the governance framework for the UPI, the FSB said. As the sole issuer of UPI codes, DSB will also perform the function of operator of the UPI reference data library.
A UPI will be assigned to OTC derivatives products and used for identifying them in transaction reporting data. This will enable authorities to aggregate data on OTC derivatives transactions by product or by any UPI reference data element.
This aggregation will facilitate the effective use of OTC trade reporting data, including to help authorities assess systemic risk and detect market abuse – a key goal of the package of OTC derivatives reforms agreed at the 2009 Pittsburgh Summit.
The FSB had noted in its 2019 work programme that finalising governance arrangements for the UPI, and identification of one or more UPI service providers, would prepare for the potential development of a global aggregation mechanism for trade reporting.
The designation of DSB comes after the FSB publicly invited prospective UPI service providers in July 2018 to submit self-assessments. The FSB assessed providers with advice from CPMI (the Committee on Payments and Market Infrastructures) and IOSCO (the International Organization of Securities Commissions).
The FSB has also decided that the data standard for the UPI code and the UPI reference data elements will be set as international data standards, and has identified the ISO (International Organization for Standardization) as the body responsible for publishing and maintaining the standards.
The FSB will engage with DSB and a range of authorities to ensure that DSB is subject to appropriately rigorous oversight arrangements and that its existing governance and consultative systems are adapted to the specific features of the UPI system, as set out in the FSB’s governance criteria and the CPMI and IOSCO technical guidance.
