Unique Product Identifier reporting helps regulators monitor systemic risk across OTC derivatives markets.
The Derivatives Service Bureau (DSB), a global reference data source for over-the-counter (OTC) derivatives transactions, has released data indicating that U.K. markets are ready for the onset of Unique Product Identifier (U.P.I.) reporting, slated for September 30, 2024, under revised U.K. EMIR rules.
“The U.P.I. is reported to trade repositories so regulators can monitor the build-up of systemic risk across the OTC derivatives market. The U.K. will be the third jurisdiction to implement UPI reporting following the U.S. and E.U. which went live on 29 January and 29 April 2024 respectively,” according to DSB officials.
The DSB, founded by the Association of National Numbering Agencies (ANNA), is the “sole source of multiple ISO standards for OTC derivatives,” such as UPIs, International Securities Identification Numbers (ISINs), Classification of Financial Instruments Codes (CFIs) and Financial Instrument Short Names (FISNs).
“In addition to its ISO mandates, the DSB has been nominated by the Financial Stability Board of the G20 to be the exclusive global operator of the UPI Service,” according to DSB officials. “This service will enable authorities to aggregate data on OTC derivatives transactions by product or by any UPI reference data element.”
“The DSB’s user onboarding data reveals a large number of U.K.- headquartered firms joined the U.P.I. Service in readiness for the U.S. and E.U. mandates coming into effect, with over 90 percent leveraging their OTC ISIN connectivity to streamline UPI integration. As a result of the advanced preparation, the DSB is noticing lower uptake in onboarding in the weeks leading up to the U.K. mandate,” officials say.
More than 390 firms have “subscribed to the UPI Service on a fee-paying basis, including 157 programmatic users. Approximately 15 percent of those organizations are U.K.-headquartered. Quarterly updates on UPI user numbers are published on the DSB’s website,” according to the DSB.
U.P.I. generation has “increased over the last few weeks, a similar trend seen in advance of the U.S. and E.U. mandates coming into effect. There are approximately 1.2 million U.P.I.s with over 8,000 new codes generated per week, up from the average of 5,000 per week. Identifier metrics are also published on the DSB website,” DSB officials add.
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