On January 9, ISDA, the Alternative Investment Management Association and the European Banking Federation submitted a joint response to a European Commission (EC) consultation on the best way to identify over-the-counter (OTC) derivatives for the purpose of transparency requirements under the Markets in Financial Instruments Regulation (MIFIR).
In the response, the associations highlight their preference for unique product identifiers (UPIs) (ISO4914) in MIFIR regulatory technical standard (RTS) 2, augmented by several other fields to ensure optimal granularity. RTS 2 sets out the technical detail of transparency requirements in MIFIR. The associations further stated that the most efficient way for users of transparency and consolidated tape data to understand the tenor of instruments covered by these requirements would be for market participants to report the effective date (among the additional fields needed). Along with the time stamp of the trade, this would allow approved publication arrangements to calculate the tenor for these users. Furthermore, the associations suggest the EC conduct a cost/benefit analysis on the use of UPI as the basis for MIFIR transaction reporting requirements.
Currently, MIFIR requires ISINs as the basis for transparency and transaction reporting requirements, but this approach has been sub-optimal in some asset classes – notably, interest rate derivatives.
Documents (1) for Joint Trade Association Response on Unique Product Identifiers
Latest
A Path to Greater CFTC-SEC Alignment
Earlier this week, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) held a roundtable on regulatory harmonization – an initiative we wholeheartedly support. The US regulatory framework has evolved over time to facilitate financial markets...
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.
Working Towards Tokenized Collateral
One of the lessons learned from recent market shocks – including the 2020 dash for cash and the UK gilt market crisis in 2022 – is that when volatility strikes and market participants must suddenly generate large amounts of cash...
IQ Interview Yazeed Alnafjan
ISDA published new legal opinions in June that recognise the enforceability of close-out netting in Saudi Arabia under regulations published by the Saudi Central Bank earlier this year. In this interview with IQ, Yazeed Alnafjan, the central bank’s deputy governor...