Regulators in Australia, Canada, the EU, Hong Kong, Japan, Singapore and the UK are set to follow suit in the coming years, making global rule sets more consistent.
It’s been 13 years since the Group-of-20 (G-20) leaders decided on a
package of measures to reform derivatives markets. Of the measures
agreed, the reporting of over-the-counter derivatives got most traction
early on, but – while an improvement on what went before – the reporting
framework never really lived up to its full potential. That’s because
of deviations in rule sets across jurisdictions, differences in data
formats and discrepancies in how individual firms interpreted the
various written regulatory texts.
Two key developments could change that. First, regulators across the
globe are revising their reporting rules to incorporate internationally
agreed data standards, starting with the US Commodity Futures Trading
Commission (CFTC), which implemented its first batch of amendments on
December 5. Regulators in Australia, Canada, the EU, Hong Kong, Japan,
Singapore and the UK are set to follow suit in the coming years, making
global rule sets more consistent.
Second, firms can now access an industry consensus interpretation of
the CFTC revisions, available as human-readable and machine executable
code, which can be used as the basis for their implementation or as a
benchmark to check their own understanding of the rules. As the first
step of ISDA’s Digital Regulatory Reporting (DRR) initiative, this
should cut down on the discrepancies that can emerge when each firm has
to independently interpret a written regulatory text. Version 1.0 of the
DRR was launched in November, and will be extended over time to cover
reporting rule amendments in other jurisdictions.
This issue of IQ explores the changes to regulatory reporting rules
and looks at how ISDA’s DRR can increase the efficiency of
implementation and improve the accuracy and consistency of what is
reported. Thirteen years after the G-20 Pittsburgh summit, regulators
could soon be receiving the accurate, comprehensive data they need to
better monitor potential sources of risk.
Towards Transparency - IQ December 2022(pdf)
ISDA
© ISDA - International Swaps and Derivatives Association
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article