The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

FSB Names Derivatives Service Bureau as Sole Provider of the Unique Product Identifier

The Financial Stability Board (FSB) has designated the Derivatives Service Bureau (DSB) as the sole service provider for the future Unique Product Identifier (UPI) system. The DSB will also be the operator of the UPI reference data library and will start to issue UPIs once their code and reference data are set as international data standards by the International Organisation for Standardisation (ISO).

A UPI will be assigned to an OTC derivatives product and used to identify the product in transaction reporting data. It will also allow regulators to aggregate data on OTC derivatives transactions by using the UPI or any UPI reference data element, and help them assess systemic risk and detect market abuse. This will be the first time regulators will be able to monitor and aggregate OTC derivatives data consistently across jurisdictions and the globe, as UPI data is less granular than ISIN data.

Emma Kalliomaki, managing director at the Association of National Numbering Agencies (ANNA) and the DSB, says that when the DSB developed templates for OTC derivatives ISINs required for MiFID II regulatory reporting, it also ensured that it would be possible in future to collect minimum UPI data from full ISIN data. This means the creation of an ISIN will autogenerate a UPI.

The DSB was selected as the UPI service provider following a July 2018 call from the FSB to prospective service providers to submit self-assessments. The assessment was then made by the FSB’s Working Group on Unique Transaction Identifier (UTI) and UPI Governance (GUUG), with advice from the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO).

The FSB noted in its work programme for 2019 that finalising governance arrangements for the UPI, and identification of one or more UPI service providers by mid-2019, would prepare for further FSB consideration in 2020 of the potential development of a global aggregation mechanism for trade reporting.

Related content

WEBINAR

Recorded Webinar: Entity identification and client lifecycle management – How financial institutions can drive $4 billion in cost savings

A new model in Legal Entity Identifier (LEI) issuance has created significant opportunities for financial institutions to capitalise on their KYC and AML due diligence. By becoming Validation Agents and obtaining LEIs on behalf of their clients, financial institutions can enhance their client onboarding experience, streamline their internal operations, and open the door to new,...

BLOG

How to use the LEI to Solve your Onboarding Problems and Cut Costs

Client onboarding and lifecycle management are an ongoing problem at many financial institutions, with inefficiencies often caused by layers of technologies and processes added to capture required data and avoid fines when new rules and regulations are introduced. A solution to the problem, which could save the global banking industry billions of dollars a year...

EVENT

Data Management Summit Virtual

The Data Management Summit Virtual will bring together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Join us online to hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...