ISDA Digital Regulatory Reporting (DRR) InfoHub

Digital Regulatory Reporting (DRR) using the Common Domain Model (CDM) is a global, collaborative industry initiative led by ISDA which uses technology to enable efficient implementation of trade reporting rules and rule amendments of multiple global jurisdictions.

The purpose of this information hub (“InfoHub”) is to provide introductory information about the DRR using the CDM:

Background
Introduction
Key Objectives
Potential Benefits of DRR using the CDM
How are Trade Reporting Rules developed for DRR?
DRR has been successfully implemented
Target DRR Development Timelines
Community-driven ISDA Governance
Fact Sheets and Press Releases

For more information regarding the Common Domain Model (CDM), please visit the ISDA CDM InfoHub

1. Background

Global authorities had previously completed the valuable work to standardize the definitions, format and allowable values for a key set of data elements, as a result of the G20 Leaders’ 2009 Pittsburgh Summit commitment to improve the OTC derivatives markets with a goal to improve transparency, mitigate systemic risk and protect against market abuse. OTC trades should be reported to trade repositories (TRs).

The Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) published a set of globally harmonized definitions, format and allowable values for key OTC data elements for the:

Unique Product Identifier (UPI)
Critical Data Elements (CDE)
Unique Transaction Identifier (UTI)

The global harmonization work was an important step towards more effective data aggregation, however DRR using the CDM could further improve the consistency of the data reported. The cost and complexity of building changes to jurisdictional rules to adopt the global harmonization guidance has raised substantial implementation challenges for market participants. Such challenges can be mitigated through use of the CDM, which makes it an opportune time for the CDM use-case of Digital Regulatory Reporting, as major changes to trade reporting rules are or will be implemented over the next two to three years.

BACK TO TOP

2. Introduction

DRR is a digitized representation of trade reporting rules and market practices based on a mutualized industry interpretation. Digitized data elements required for reporting can be used for submission to trade repositories. Regulated entities will be able to implement new and amended regulatory reporting rules using an industry-led standardized interpretation of the requirements as free, machine-executable, open-access code.
Ultimately, DRR will allow regulators to publish reporting rules as executable code that can be automatically read and interpreted by the technological systems of reporting entities, therefore improving and streamlining the reporting process for all asset classes.

BACK TO TOP

3. Key Objectives

Key objectives of the DRR include the following:

Provide a digitized representation of jurisdictional trade reporting rules through a single, standardized set of unambiguous. machine-executable, open-access code;
Digitize reportable data elements for submission as code to trade repositories;
Provide digitized representations that are extensible and therefore can be re-used for rules in other jurisdictions with the same requirement.
Facilitate implementation of new requirements such as the ISO 20022 or UPI.

BACK TO TOP

4. Potential Benefits of DRR using the CDM

DRR can provide numerous benefits to those in scope for reporting, CCPs, trade repositories, technology, data and services vendors, and even the regulatory community, including:

Facilitates efficient and consistent implementation across trade reporting jurisdictions of the globally harmonized recommendations, including CDE, UPI, UTI, and LEI;
Decreases inconsistencies in the way individual institutions interpret and build trade reporting rules or industry practices;
Increases interoperability between firms’ reporting processes;
Reduces reconciliation breaks in dual-sided reporting regimes;
Revisions to regulations can be delivered through centralized DRR reporting code changes:
- Only incremental effort is needed to extend the DRR model to other jurisdictions, or to reflect rule changes
- New rules may be able to be implemented in a shorter timeframe with less effort and cost
Reduces the need for firms to dedicate significant resources and budget to change their systems for each new or amended reporting rule, allowing more time to be spent on implementation. Time, cost and resources needed by industry participants to build new or amended reporting rules from scratch is therefore reduced;
Improves the quality of reported data, resulting in cleaner data for regulatory aggregation, use and analysis in order to effectively evaluate systemic risk;
Will ultimately enable regulators to publish reporting rules as executable code that can be automatically read and interpreted by the technology systems of reporting entities.

BACK TO TOP

5. How are Trade Reporting Rules developed for DRR?

This short video provides a broad overview of how regulations are modeled for DRR.

BACK TO TOP

6. DRR has been successfully implemented for the CFTC Rewrite

DRR has been live since the implementation of the CFTC Rewrite on December 5, 2023.

Successful DRR Implementation for CFTC Swap Data Reporting Amendments

The EMIR Refit is currently being developed in the DRR using the CDM. Institutions involved with the development include but are not limited to:

For target timelines of completion, as well as DRR development for additional trade reporting jurisdictions, please see “Target DRR Development Timelines” below.

BACK TO TOP

7. Target DRR Development Timelines

The DRR will be modelled for multiple trade reporting rules, including the EMIR Refit, FCA, JFSA, ASIC, Monetary Authority of Singapore (MAS), and HKMA.