For trade reporting, the original ISDA OTC Derivatives Taxonomy (“Taxonomy v1.0”) has been in use for cross-jurisdictional reporting for Credit, Rates, Equities, Commodities and FX since 2012. In 2015, industry working groups, asset class experts, and steering committees began a collaboration to update Taxonomy v1.0 for trade reporting. However, as global data harmonization efforts moved to the forefront, industry agreed to pause the work to update Taxonomy v1.0. Parties are able to opt to use Taxonomy v1.0 for purposes of regulatory transaction reporting until such time as the relevant global standard for product identification is established.
MIFID II/MiFIR (including RTS 1, 2, 22, and 23) that initially came into force 3 January 2018 mandated the ISIN as the sole alternative for identification of financial instruments, including derivatives. Industry working groups, asset class experts, and steering committees collaborated to form “Taxonomy v2.0” which could be used as inputs when requesting an ISIN for MiFID II, until such time as the relevant global standard for product identification and inputs are substantively established.
ISDA proposes to allow two versions (specifically, Taxonomy v1.0 and Taxonomy v2.0) of the ISDA Derivatives Product Taxonomy to exist in parallel, but to operate independently of one another. Taxonomy v1.0 would retain its status of “Final” and can still be used for purposes of regulatory transaction reporting until such time as the relevant global standard for product identification is established, and Taxonomy v2.0 could be used, after a public comment period, for purposes of ISIN generation until such time as the relevant global standard for product identification and inputs are substantively established. Links to draft Taxonomy v1.0 and Taxonomy v2.0 are provided below.
Input or objections to the proposal can sent to EHsu@isda.org.
Taxonomy v1.0_CR RA FX EQ CO
Taxonomy v2.0 EQ CR FX IR
Taxonomy v2.0 CO
ISDA OTC Taxonomies “Rules of Operations” for the Taxonomy governance process
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