ISDA and other industry associations have recommended the global adoption of an entity-based reporting framework with the objective of improving derivatives transparency. The analysis identifies the strengths of such a framework as being:
- it will reduce the cost and burden of transaction reporting currently placed on end users;
- it will eliminate the duplication and replication of other regulatory requirements;
- streamlined, clarified reporting obligations are a more effective tool to improve the quality and accuracy of reported transactional data; and
- it will make high-level, multi-jurisdictional harmonisation of reporting requirements easier and more effective.
It goes on to identify the next steps required in order to implement such a framework:
- an entity-based reporting framework should be adopted across jurisdictions;
- existing processes, and not dual-sided reporting, should be used to identify mismatches in trade terms;
- a tiebreaker methodology for determining the responsible reporting party should be implemented consistently;
- legal responsibility for non-reporting counterparties to verify trade reports should be removed; and
- greater focus should be placed on global data harmonisation efforts.