The International Swaps and Derivatives Association, Inc. (“ISDA”), the Institute of International Finance, The Investment Association, and the Securities Industry and Financial Markets Association (the “Associations”) appreciate the opportunity to provide the Committee on Payments and Market Infrastructures (“CPMI”) and the Board of the International Organization of Securities Commissions (“IOSCO”) with comments in response to the Consultative Report referenced above (the “Consultative Report”).

The Associations are strong proponents of global data harmonization, individually and collectively working in tandem with their members and other buy- and sell-side market participants and market infrastructure providers to promote the important role of global standards in improving data quality and increasing the efficiency and value of reporting and other global regulatory requirements. We are supportive of the initiatives undertaken by the Working Group for the harmonization of key OTC derivatives data elements (the “Harmonisation Group”), beginning with its efforts to develop guidance for a uniform global Unique Transaction Identifier (“UTI”).

Beginning with the reporting regulations promulgated by the Commodity Futures Trading Commission (“CFTC”), ISDA understood the value of consistent use and application of a trade identifier, working with industry participants to develop practices pertaining to Unique Swap Identifiers (“USI”)1. ISDA anticipated the necessity of a global trade identifier (rather than jurisdictional ones), and has attempted to convince regulators to adopt an approach to creating a UTI value that would be globally extensible. In the absence of a UTI standard endorsed by global regulators, ISDA worked with its members and the broader OTC derivatives industry to develop an approach to the generation, communication and matching of UTI2 (the “ISDA UTI standard”). The ISDA UTI standard has been widely implemented and used by market participants while meeting their regulatory reporting requirements, and accepted by various regulators globally. However, absent official endorsement of the ISDA UTI standard or requirements from global regulators for parties to use a consistent trade identifier value for reporting cross-jurisdictionally, it is not possible to have a complete and consistent take-up by the parties reporting derivatives transactions globally. Therefore, we appreciate the efforts of the Harmonisation Group to recommend a standard for UTI that can be adopted by regulators globally for uniform implementation and application.

Continue Reading >