[ T H O U G H T L E A D E R S H I P | D T C C ]
As regulations in the trade reporting landscape continue to change , internal operations , compliance , and information technology teams ( and systems ) face the pressure to ensure successful reporting continues . Many firms have a fragmented , and therefore inefficient , technical architecture in place for managing the data required for trade reporting . Common issues include compromised control frameworks ; siloed , duplicated , or non-strategic processes ; sourcing the relevant regulatory expertise ; and the never-ending challenge of reconciling multiple data sets and managing technology upgrades to meet regulatory changes . All of this is prone to risk and error , both which come with high remediation costs and potential fines . The cost of owning , operating , and maintaining internal trade reporting systems is expensive , can add additional risk , and derives limited competitive advantage .
Compliance challenges Among the regulations resulting from the 2008 financial crisis were reporting mandates for derivatives transactions . Jurisdictions rolled out their respective rules at different times and without close coordination . The result : many differences in reporting formats , trade data elements and other parameters , which are now triggering a new round of rule revisions designed to increase standardisation across jurisdictions .
“ This post-crisis global regulatory surge and ongoing failure to harmonise rules from one reporting regime
Keeping pace with the rapidly changing trade reporting landscape
The Trade spoke with Val Wotton , DTCC ’ s managing director , product development and strategy of repository and derivatives services , to learn more about how the DTCC helps firms in the face of a rapidly evolving global trade reporting landscape .
to another has necessitated continual modifications to firms ’ technology platforms ,” says Wotton . “ After a decade of patches to accommodate one new rule or update after another , the trade processing and reporting infrastructure in most firms today is duplicative and inefficient .”
For firms that have developed their own pre- and post-reporting capabilities , the upcoming rewrites of derivatives rules – which will include adoption of Common Data Elements ( CDE ) and Unique Product Identifiers ( UPI ) for reporting – will spur yet more updates to their infrastructure and further burden already-stressed capacity and functionality .
Evolving regulatory provisions will also necessitate ongoing refinements to firms ’ data management and messaging processes .
For example , if , as expected , regulators adopt the ISO 20022
34 // TheTRADE // Winter 2021