On 17 January 2012, a task force (“Task Force”) consisting of the Committee on Payment and Settlement Systems (“CPSS”) and the Technical Committee of the International Organization of Securities Commissions (“IOSCO”) issued a final report on OTC derivatives data reporting and aggregation requirements. This report is the most recent step taken at the initiative of the Financial Stability Board (“FSB”) with respect to the implementation of G20 objectives, including the requirement that all OTC derivatives contracts be reported to trade repositories (“TRs”) in order to improve transparency, mitigate systemic risk and protect against market abuse.
The report specifies minimum requirements for reporting data to a TR and for the reporting by a TR to regulators. The Task Force recommends that transaction-level data be reported to TRs, including transaction economics, counterparty information, underlier information, operational data and event data.
The report discusses issues related to access to data. It recommends that TRs implement measures to provide effective access to authorities for both routine data and non-routine data in order to permit authorities to fulfill their regulatory responsibilities and to address specific issues that may arise from time to time. The report recommends that reporting entities and counterparties should have access to their own data and also addresses the possibility of public dissemination of certain data as a means of promoting understanding of the functioning of the OTC markets, subject to confidentiality and other legal requirements.
The report also addresses data aggregation mechanisms and tools needed by authorities to aggregate data in a manner sufficient to fulfill their regulatory mandates. The Task Force recommends the creation of a system of legal entity identifiers (“LEIs”), continued international consultation regarding the implementation of LEIs and an international effort to develop an international product classification system for OTC derivatives. The Task Force further recommends that CPSS-IOSCO or FSB make a public statement calling for the timely industry-led development, in consultation with authorities, of a standard product classification system that can be used as a common framework for classifying and describing OTC derivative products and that the FSB direct further consultation and coordination by financial and data experts regarding these initiatives.