The Derivatives Service Bureau (DSB) has delayed implementation of the Unique Product Identifier (UPI), which was initially due to go live in Q3 2022, but will now be implemented in response to regulatory mandates, the first of which is expected to come from the CFTC in November 2023.
The decision to delay implementation and wait for a regulatory mandate is based on covering the costs of the identifier, although plans are in place, but not yet confirmed, to finalise and publish UPI product templates 15 months ahead of the first regulatory reporting mandate, along with UPI technical specifications for API connectivity.
A user acceptance and integration testing environment, as well as user onboarding, are expected to go live nine months ahead of the first regulatory reporting mandate, with a UPI production system available and able to create, search and report live UPIs three months ahead of a regulatory mandate. This, says the DSB, should allow users plenty of time for testing and getting the UPI into production on time to meet a mandate.
“UPI implementation is on track and waiting for an official mandate,” says Emma Kalliomaki, managing director of the Association of National Numbering Agencies (ANNA) and the DSB. “The CFTC is expected to provide a 12-month notice period towards the end of 2022 and mandate use of the UPI in November 2023.
“The EU and UK are a waiting game, although they have indicated an 18 month lead time, suggesting the US will lead on implementation, followed by the EU and UK. Regulatory authorities in Australia and Japan are indicating a similar timeframe.”
The UPI is designed to facilitate effective aggregation of OTC derivatives transaction reports on a global basis. In the first instance, it will be used to uniquely identify the product involved in an OTC derivatives transaction that an authority requires, or may require in the future, to be reported to a trade repository. Longer term, the UPI will work in conjunction with Unique Transaction Identifiers (UTIs) and Critical Data Elements (CDE) that are also expected to be reportable to global regulatory authorities.
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