Global standards for derivatives data proposed by regulators

24 August 2011

Regulators have called for the implementation of a new set of global standards and requirements for the reporting of derivatives data.

In a new study, the International Organisation of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS) said more information on over-the-counter derivative (OTC) trades needs to be collated centrally.

A global repository infrastructure would provide regulators with a better view of those holding derivatives positions - this would allow for greater transparency which would reduce both counterparty and systemic risk, enhance financial stability and curb market abuse.

In a statement, the organisations said: “The report also finds that certain information currently not supported by Trade Repositories (TR) would be helpful in assessing systemic risk and financial stability, and discusses options for bridging these gaps.

“Public dissemination of data, it is noted, promotes the understanding of OTC derivatives markets by all stakeholders, underpins investor protection, and facilitates the exercise of market discipline.”

The document calls for trades to be tagged by legal entity identifiers (LEI), which would operate across international infrastructures.

A final report on the proposals is expected by the end of the year after a public consultation period.

By Jim Ottewill