UTI and UPI post JFSA and EMIR REFIT go-live

Those who have been following our newsletters and working groups, will be aware of the work that we have been doing in assisting customers with UTI sharing and UPI enrichment, so here is a brief update on both these items.

Since JFSA Rewrite and EMIR REFIT go-live, we have been assisting our customers with UTI retrieval through our Global UTI Connect module, so that corresponding UTIs can be captured correctly for their submissions.

From an onboarding perspective, it is pleasing to hear that customers valued our support in assisting them navigate through the forms and options required by the different jurisdictional trade repositories. Achieving smooth onboarding was key to getting testing underway as quickly as possible, so kudos to our global integration teams.

Since go-live, customers have noticed differences in some of the pairing field values such as, "Notional", "Exchange Rate", "Exchange Rate Basis", "Option Type", "Notional amount of Leg 2". We have been able to show this side by side through a normalized view, so although they are different and within the customers' tolerance appetite, they have been able to identify them and subsequently pair them either individually or in bulk.

We are still halfway in this journey as we look to further analyze customer behavior to improve automation and additionally prepare for the upcoming allege files later this year from the FCA EMIR, ASIC, MAS and CFTC regimes. This will further facilitate customers in achieving global harmonization of UTIs. Feature-wise, we are aiming to provide updated visuals around pairing and UI features to help with UTI management, so please watch this space.

As we change the "T" to a "P" and move onto the topic of UPIs, here is the latest after working with customers post EMIR REFIT.

Some UPIs still do not exist — this could be due to the reliance on counterparties who have creation abilities within their ANNA DSB license. This is problematic as it prohibits customers who do not have this access from setting up new UPIs intraday. Some customers have opted to have either the standard or infrequent user type as it gives them contingency to create UPIs, so it is worth investigating a similar approach.

Field format discrepancies — certain regulatory fields have differences in what is required under EMIR and ANNA DSB. For example, the field "Name of the underlying index" under EMIR is free text up to 50 alphanumeric characters but ANNA DSB has its own taxonomy. Whilst this could be a simple mapping exercise conforming to ANNA DSB, many customers have stated that none of the prescribed values were applicable, resulting in a conflict - customers either need to report accurately under EMIR or may not be able to retrieve the corresponding UPI.

Asset class inconsistencies — Some product definitions are not applied across different asset classes. For example, in FX and equities, CFD is clearly defined but not quite as clear under commodities which has resulted in customers being unable to populate the attributes consistently.

Mandatory Field Inconsistencies — Under the ASIC rewrite, the "Settlement method" field has been decommissioned, but this field is still a mandatory attribute for correct UPI retrieval for most of the products. So, customers need to keep track of this field even though it is no longer required in the regulation.

ISO Standard Inconsistencies — This applies to CFI codes where ANNA DSB uses CFI (ISO 10962:2015) list as a reference list, while many customers use the CFI (ISO 10962:2021) list.

To conclude, some issues remain to be ironed out to ensure that UPI retrieval can be performed unambiguously and without issues. From there, it should be able to serve as a useful identifier for regulatory data aggregation and systemic risk monitoring, as intended.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.