ISDA Calls for Global Alignment in UPI, UTI Implementation

ISDA is urging the FSB to “intensify monitoring and coordination of jurisdictional alignment” to the global UTI, UPI and CDE recommendations.

ISDA has issued a letter to the FSB (Financial Stability Board)’s Working Group on UTI and UPI Governance – the GUUG – calling for action to align global implementation of key OTC derivatives data elements.

The GUUG was established in March 2016 to recommend governance arrangements for the Unique Transaction Identifier (UTI) and Unique Product Identifier (UPI), in coordination with the CPMI and IOSCO working group for harmonisation of key OTC derivatives data elements.

> ALSO READ: Governance of OTC Derivatives Data Elements Finalised (10 Oct 2019)

ISDA is calling on the FSB GUUG – as the interim International Governance Body for the UPI, the UTI and other CDEs – to “intensify monitoring and coordination of jurisdictional alignment” to the CPMI-IOSCO Harmonisation Group recommendations by individual reporting jurisdictions.

The letter says this is especially important at a time when jurisdictional authorities are actively drafting new rules or amendments to existing rules (e.g. CFTC, EMIR, SEC, SFTR) to incorporate the global UTI, UPI and CDE recommendations.

“New or revised jurisdictional regulations that differ even slightly from the global recommendations will force institutions to consider and build logic for each jurisdictional variant, which will become extremely challenging, costly, and may even negatively affect the data supplied to regulators,”  the letter says.

“Consistent adoption of the relevant global recommendations will enable market participants to complete their reporting flow builds once and use it to comply with the requirements of multiple jurisdictions.”

> ALSO READ: FSB Designates UK Agency as Sole UPI Service Provider (3 May 2019)

ISDA also calls for consistency in implementation timing, without which reporting parties, market infrastructures, trade repositories, and other parties would have to adjust their reporting infrastructures to layer in any differing generation logic each time there is a new jurisdictional UTI compliance date.

“Variations in global UTI implementation timeframes across jurisdictions would create a substantial implementation burden for market participants around the globe,” the letter says.

This would further hinder the ability of regulatory authorities to clearly and uniquely identify the same transaction across jurisdictions, and work against a key goal of the global harmonisation efforts – to improve transparency in the derivatives markets.

The full letter is available here.

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