Following our recent report on the results of the Derivatives Service Bureau’s (DSB’s) first 2019 industry consultation the Bureau has today released the results of its second 2019 industry consultation.
In line with the first 2019 report, the second shows ongoing industry interest in further analysis of DSB functionality with a view to the delivery of improved data quality, standardisation and automation, as well as further strengthening of the organisation’s cybersecurity processes and governance.
The second consultation closed on the July 29, 2019, with nine responses representing 12 institutions, four of which were trade associations. Industry concurred with 80% of the proposals set out in the second consultation paper, leading to half of them being taken forward for analysis to better understand their potential benefits and impact.
The industry requested that the DSB undertake further analysis, for example, on leveraging the ISIN-LEI service to provide LEI and other supplemental data to further improve data quality. By placing the LEI mapping table in the product mapping template, the data enables anyone consuming the ISIN record to have easier access to LEI mapping. This, in turn, offers the potential to improve downstream processing. The DSB will conduct a cost-benefit analysis of this solution on a business as usual basis, with no cost impact to users.
Another industry request for more analysis resulting from the second consultation, was for the DSB to look at the CFI code coverage it provides and whether and how it needs to be taken forward for implementation. Evaluation will also be undertaken by the DSB to ascertain whether and by how much the annual fee determination process can be brought forward in 2020.
Following industry feedback, an industry Agreement Forum will be formed to commence work in relation to multiple or group-wide agreements with the aim for recommendations to be included in the annual industry consultation in 2020.
Industry interest in the adoption of international best practice on cybersecurity governance has been met by the DSB with the creation of a part-time Chief Information Security Officer (CISO), who will be tasked with strengthening the DSB’s cybersecurity processes. The DSB will review the role in 2020 to determine the most effective way to enhance cybersecurity governance in the medium term.
Malavika Solanki, a member of the DSB management team, says that with industry ideas driving developments, the DSB is pleased with the partnership-driven approach that is emerging. She comments: “As we continue to adopt user sourced initiatives, we are increasingly focusing on aiding consistent use of data contained within the OTC ISIN record. We have also observed an evolution from use of OTC ISINs for MiFID II RTS 23 purposes to improved integration in users’ infrastructures as the industry realises the benefits of using OTC ISIN records in its own workflow processes.”
Along with the second consultation report, the DSB published a draft 2020 DSB Access and Usage Agreement and associated policies, giving visibility of potential changes and an industry comment period with a deadline of September 2, 2019. A final version of the agreement will be published on September 20, 2019.