The Derivatives Service Bureau reveals Unique Product Identifier timeline
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The Derivatives Service Bureau reveals Unique Product Identifier timeline 08 December 2020UK Reporter: Maddie Saghir
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The Derivatives Service Bureau (DSB), has set out the forthcoming DSB consultation timelines for the principles underlying the fee model for the new Unique Product Identifier (UPI).
The key dates for industry to be aware of for the UPI fee model consultation process are 11 January 2021 for the first UPI fee consultation, which ends on 5 March 2021, and 10 May 2021 for the second industry consultation, which ends 9 July 2021.
Another important date is 9 September 2021 for the publication of the final consultation paper.
DSB explained the first of two rounds of consultation enables the industry to shape the key principles that will underpin the fee structure for the UPI.
The DSB said it encourages all market participants that report to trade repositories (TRs), and will need to incorporate the UPI into their workflows, to review and respond to the consultation, so that a broad spectrum of views can be reflected in the service that is introduced in 2022.
In 2019, the FSB gave its decision to designate the DSB as the sole service provider for the future UPI system, performing the function of issuer of UPIs as well as operator of the UPI reference data library.
The purpose of the UPI is to uniquely identify over the counter (OTC) derivatives products that authorities require, or may require in the future, to be reported to TRs. The UPI would consist of a product classification system and associated code.
Emma Kalliomaki, managing director of Association of National Numbering Agencies (ANNA) and the DSB, explained: “UPIs are being introduced as part of a package of G20 reforms to assist regulators with aggregation of global OTC derivative data to improve transparency, mitigate systematic risk and protect against market abuse.”
According to Kalliomaki, given the global footprint of the UPI, and the need for broad market readiness, DSB wants to give the industry advance notice about the upcoming UPI consultation process so that they have as much time as possible to prepare for engagement.
Malavika Solanki, a member of the DSB management team, said: “Any firm that needs to report to a TR will need to have access to the UPI either directly or indirectly.”
“The DSB is working closely with industry participants at each of the Product Committee and Technology Advisory Committee, as well as with global regulatory authorities to ensure that the UPI service meets the needs of all stakeholders. We would very much like to hear from a diverse range of globally dispersed voices so that users with differing post trade workflows have their views captured in how the UPI service is shaped in the years to come,” added Solanki.
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