Financial Stability Board Publishes Governance Arrangements for Unique Product Identifier
10/09/2019The Financial Stability Board has published a report on governance arrangements for the Unique Product Identifier, a globally harmonized code identifying over-the-counter derivatives products reported to trade repositories. The UPI will enable authorities to aggregate data on OTC derivatives transactions, which will in turn help them to assess systemic risk and detect market abuse.
The UPI will sit alongside the Unique Transaction Identifier, a code that identifies individual OTC derivative transactions reported to trade repositories. The intention is to introduce UPIs over the coming years, through a staged legislative and regulatory process. The FSB plans to make UPIs and UTIs subject to common regulatory oversight. It has determined that the UPI Governance Arrangements should feature:
- One or more UPI service providers that would issue UPI codes and maintain associated reference data;
- An operator of the UPI Reference Data Library that would record all UPI codes and their associated reference data;
- An international standardization body for the UPI that would register and maintain UPI codes and reference data elements as international data standards;
- An International Governance Body that would provide regulatory oversight and coordinate the other elements of the UPI governance arrangements; the Legal Entity Identifier Regulatory Oversight Committee has been identified as the most appropriate body for this in the long term;
- An Industry Representation Group consisting of representatives of market participants to consult with other governance bodies; and
- Authorities and standard-setting bodies that will continue to work on implementation.
The FSB acknowledges that implementation is likely to be staggered across different jurisdictions but recommends that all national regulators take action to implement the UPI Technical Guidance by no later than Q3 of 2022. The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions have published a separate report on governance arrangements for other critical data elements (CDE) for OTC derivatives.
View the FSB's governance arrangements for the UPI.
View the UPI Technical Guidance.
View details of the IOSCO and BIS report on CDE governance arrangements.
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