Regulators urged to agree on derivatives trade data

DerivativesEleven industry associations, including fund bodies, say they support a set of principles developed by the International Swaps and Derivatives Association (Isda) that aim to improve regulatory reporting standards for derivatives.

The standards include a call for regulators to help by agreeing on the trade data they need for cross-border derivatives trades in order the promote harmonisation.

Increased transparency of derivatives markets is a key aim of the G20 in its effort to contain systemic risk.

The associations include the European Fund and Asset Management Association (Efama) and the German Investment Funds Association, the BVI.

The principles were developed to address challenges that have emerged in the cross-border implementation of derivatives reporting rules.

Isda says significant progress has been made in meeting a G20 requirement for all derivatives to be reported to trade repositories to increase regulatory transparency. However, a lack of standardisation and consistency in reporting requirements within and across jurisdictions has led to concerns about the quality of the data being reported.

As well as calling on regulators to agree which data is needed, the associations also want policy makers to adopt the use of open standards – such as legal entity identifiers (LEIs), and existing messaging standards, such as FIX – to drive improved quality and consistency in meeting reporting requirements.

The other associations supporting the measure are: the Australian Financial Market Association, the Alternative Investment Management Association, the British Bankers’ Association, the Futures Industry Association, the Global Financial Markets Association, ISDA itself, the Managed Funds Association, the Securities Industry and Financial Markets Association and its Asset Management Group Sifma AMG, and The Investment Association.

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