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A-Team Insight Blogs

Virginie’s Blog – It’s Good to Talk (But Actions Are Also Needed)

August has truly been a month dominated by discussions at the regulatory level about data standards. Not only has the Committee on Payment and Settlement Systems (CPSS) teamed up with the International Organisation of Securities Commissions (IOSCO) to produce a consultative report on the means via which OTC derivatives data should be collected, stored and disseminated by trade repositories across the globe (including standard formats), national regulators including the US Commodity Futures Trading Commission (CFTC), the Canadian Securities Administrators (CSA) and the Hong Kong Monetary Authority (HKMA) have also been debating the standardisation issue.

This week, CPSS and IOSCO published their OTC derivatives report, which proposes minimum data reporting requirements and standardised formats, and the methodology and mechanism for data aggregation on a global basis for trade repositories (a more detailed look at which will be on the site soon). Unsurprisingly, given that the regulatory community is aiming to implement international standards and both bodies are global in nature, the paper references the work that has thus far gone into structuring a legal entity identification (LEI) initiative. It notes that further “international consultation would be beneficial” in these efforts, thus echoing the Office of Financial Research’s (OFR) reasoning behind the delay of final rules for the LEI in the US.

The Canadian regulator and the HKMA are also awaiting international input on data standards so that they can factor them into their own trade repository efforts. To this end, both regulators have recently produced consultation papers that state directly that they will closely follow international data standardisation efforts and aim to be on the same page as other regulators in adoption of any globally agreed standards.

For its part, the CFTC has been leading the charge in the US to encourage public debate on the issue of data standards and has used the forum of the data standards subcommittee, under the auspices of the Technology Advisory Committee (TAC), to achieve just this. The group conducted the first meeting of three scheduled for this year this month, during which subcommittee chair and CFTC chief economist Andrei Kirilenko doled out ‘to do’ lists for each of the four working groups that are aiming to progress these discussions.

However, turning that debate into action is the next order of business for the regulatory community and it is one that will take an unprecedented level of coordination if it is to be carried out on a global scale. Moreover, given that a final decision on the LEI issue has been delayed until early next year, the outlook for other key areas such as instrument identification does not look too promising.

Ensuring that ISO’s proposed draft LEI standard does not go the way of the standards organisation’s previous effort, the ISO 16372 International Business Entity Identifier (IBEI), will be of paramount importance in the meantime.

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