ISDA Publishes Paper on Key Principles for Improving Regulatory Transparency and Derivatives Trade Reporting

ISDA published a paper, titled "Improving Regulatory Transparency of Global Derivatives Markets: Key Principles." The paper provides a number of actions and key principles that stakeholders can utilize to improve regulatory transparency.

According to ISDA, significant progress has been made already in improving regulatory transparency, since "virtually all" derivatives transactions are reported to trade repositories. However, due to the lack of standardization of reporting requirements across jurisdictions, challenges remain that lead to an unclear or partial picture of risk in global jurisdictions, as well as to confusing and duplicative rules for market participants.

In its paper, ISDA outlines five key recommendations or "principles" for standardizing, aggregating and sharing data across borders:

• regulators around the world should identify and agree on the trade data they need to fulfill their supervisory responsibilities, and then issue consistent reporting requirements across jurisdictions;
• policy makers should embrace, adopt and use standards – such as legal entity identifiers ("LEIs"), unique trade identifiers ("UTIs"), unique product identifiers ("UPIs") and Financial products Markup Language ("FpML") - to improve the quality of their reports and consistency in meeting their reporting requirements;
• market participants and regulators should collaborate and secure agreement on common solutions where global standards do not yet exist;
• laws and regulations that prevent cross-border information sharing should be repealed or amended; and
• reporting progress should be benchmarked, and data reported to repositories should be tracked and measured, to ensure the quality and completeness of data.

See: ISDA Paper: "Improving Regulatory Transparency of Global Derivatives Markets: Key Principles".