Reaping strategic data benefits from mandatory trade reporting projects

Hugh Daly

Journal of Securities Operations & Custody, 2018, vol. 10, issue 1, 38-44

Abstract: Due to differing data standards and protocols across jurisdictions, interpretation is key when it comes to implementing the regulatory directives formulated at the Pittsburgh G20 summit. The core principles of the G20 conclusions were meant to increase transparency and reduce counterparty risk around OTC Derivatives. However, data and processing fragmentation presents a huge challenge to effective compliance. This paper discusses the challenges of reporting cross asset trades, and analyses the difficulties that can occur due to multiple asset classes being in use, ‘unclean’ division between product silos, or taxonomies being difficult to map, all of which can result from bad communication due to lack of familiarity with reporting methodology or data being stored in different generations on different systems. The key is to face an on-going series of storms rather than a single ‘tsunami’ of regulation. Many are now realising that a more strategic approach must be taken, so the paper looks at the challenges around reporting cross asset trades. Front-ending challenges rather than cobbling together a solution in order to meet the deadlines can reap rewards in the long term, as can sourcing accurate and comprehensive data from your trading systems, mapping data to the regulatory format, and data enrichment to fill in gaps which stem from unclean data storage.

Keywords: MiFID II; EMIR; SFTR; data harmonisation; trade and transaction reporting (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2018
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