European firms are broadly ready to meet their UPI (Unique Product Identifier) regulatory requirements, having seen a steady increase in EU headquartered firms joining the service.
Currently, 246 firms have subscribed to the UPI Service across various fee-paying user types, including 122 programmatic users, with more than 100 organisations subscribing to the UPI Service since the US compliance date of 29 January 2024.
Among these organisations, banks constitute the largest group at 44%, with other participants such as trade execution platforms, clearing houses, brokerages, trade repositories, and data management providers also onboarded. Around 33% of the onboarded organisations have their headquarters based in the EU.
The data was collected by the Derivatives Service Bureau (DSB), which queried industry readiness for European UPI regulatory reporting requirements, which are part of the EU EMIR Refit Regulations.
Emma Kalliomaki, managing director of ANNA and the DSB, said: “This second UPI compliance milestone reflects the momentum of G20 jurisdictions fulfilling commitments made after the financial crisis, contributing to the ongoing efforts to enhance global systemic risk monitoring through the aggregation of OTC derivatives data.
“We have worked closely with stakeholders to ensure the OTC ISIN design is consistent and complementary with the UPI. As a result, the relationship between the two identifiers is being leveraged for the EU UPI implementation to ease integration and reduce the regulatory reporting burden on firms.”
The European Union will implement UPI reporting from 29 April 2024 as the second G20 jurisdiction, following the US, and ahead of the UK effective date in September 2024.
The EU UPI reporting will be complementary to the existing ISIN for OTC derivative reporting, which is important to price transparency and market abuse detection under MiFIR, and for aggregating OTC derivatives data under EMIR. This means that the EU (and the UK) will be reporting the OTC ISIN where the EMIR scope aligns with MiFIR, with the UPI being reportable for those derivatives that are part of the broader scope of EMIR.
UPI data attributes and the UPI code itself are included in the OTC ISIN record. Organisations using the OTC ISIN can leverage established workflows and connectivity for integration of the UPI, ensuring global convergence and harmonisation. This is an integral component of the EU’s approach, designed to establish cross-regulation consistency and lower reporting burdens for firms.
©Markets Media Europe 2024
