Hidden in Plain Sight? Derivatives Exposures, Regulatory Transparency and Trade Repositories

From Archegos in the US to the energy crisis in the EU to the problems faced by liability-driven investment (LDI) strategies in the UK, recent events have meant derivatives transparency is once again becoming a public policy agenda priority. Some regulators have voiced concerns about whether they can see and monitor risk exposures at counterparties in their jurisdictions and even whether some relevant counterparties are beyond their regulatory reporting perimeter.

These concerns come amid – and despite – prescriptive requirements to report derivatives transactions to regulators via trade repositories in major jurisdictions, which has been accomplished through significant investment in time and money by market participants and the official sector.

ISDA believes much of the information required to see and identify the build-up of derivatives exposures and risks is available in the trade repository data that is reported to regulators. But, as per the title of this report, it may well be hidden in plain sight – not easily understood, not readily functional, not easily shared among regulators and therefore not as useful as it might otherwise be.

To help inform and contribute constructively to policy discussions on derivatives transparency, ISDA is publishing this paper to explore the following questions:

  • What information on derivatives trades and exposures is currently available to policymakers through trade repositories?
  • How can this information be efficiently and effectively used by policymakers to address their risk exposure concerns?
  • How can derivatives trade and risk data be shared by regulators that receive it with other policymakers within and across jurisdictions, in order to provide a more holistic view?

The paper covers derivatives reporting and trade repositories in the US, EU and UK.

Click on the attached PDF to read the full report.

Documents (1) for Hidden in Plain Sight? Derivatives Exposures, Regulatory Transparency and Trade Repositories

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