Report on OTC derivatives data reporting and aggregation requirements - consultative report

CPMI Papers  |  No 96  | 
24 August 2011
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  |  59 pages

This consultation report is about the OTC derivatives data that should be collected, stored and disseminated by trade repositories (TRs). CPSS and IOSCO support the view that TRs, by collecting such data centrally, would provide the authorities and the public with better and timely information. This would make markets more transparent, help to prevent market abuse and promote financial stability.

The report addresses Recommendation 19 in the October 2010 report of the Financial Stability Board (FSB), Implementing OTC derivatives market reforms, which called on the CPSS and IOSCO to consult with the authorities and the OTC Derivatives Regulators Forum in developing:

(i)      minimum data reporting requirements and standardised formats, and

(ii)    the methodology and mechanism for data aggregation on a global basis.

The proposed requirements and data formats will apply to both market participants reporting to TRs and to TRs reporting to the public and to regulators. The report also finds that certain information currently not supported by TRs would be helpful in assessing systemic risk and financial stability, and discusses options for bridging these gaps.

Issues relating to data access for the authorities and reporting entities are discussed, including methods and tools that could provide the authorities with better access to data. Public dissemination of data, it is noted, promotes the understanding of OTC derivatives markets by all stakeholders, underpins investor protection and facilitates the exercise of market discipline.

The report also covers the mechanisms and tools that the authorities will need to  aggregate OTC derivatives data. It advocates a system of standard legal entity identifiers (LEIs) as an essential tool for aggregation of such data. It further recommends that TRs actively participate in the LEI's development and use the system once it becomes available. As the implementation of a universal LEI will require international cooperation, it is noted that further international consultation would be beneficial.

Comments on the report are invited from all interested parties and should be sent by 23 September 2011 to both the CPSS secretariat (cpss@bis.org) and the IOSCO secretariat (OTC-Data-Report@iosco.org). Published along with the report is a cover note that sets out specific issues on which the committees seek comments during the public consultation period. The comments will be published on the websites of the BIS and IOSCO unless commentators have requested otherwise.

After the consultation period, the CPSS and IOSCO will review all comments received and publish a final report by the end of 2011.