On 29 November 2023, the European Commission published a targeted consultation document – Selection of a unique product identifier for public transparency in over-the-counter (OTC) derivatives transactions.

The provisional agreement on the reform of the Markets in Financial Instruments Regulation includes reforms to the scope of pre- and post-trade transparency reporting for OTC derivatives, including by specifying the classes of OTC derivatives subject to pre- and post-trade transparency. The provisional agreement stipulates that identifying reference data for in-scope OTC derivatives must be reported to the European Securities and Markets Authority (ESMA). The identifying reference data reported to ESMA includes a unique product identifier and “identifying reference data” that uniquely identify the product.

Considering Article 27 and Recital 19b of the provisional agreement the co-legislator has made three determinations:

  • Compliance with the pre-and post-trade transparency obligations shall comprise using a unique product identifier.
  • The current ISIN is not effective for compliance with the pre- and post-trade transparency obligations for in-scope OTC derivatives.
  • Any chosen unique product identifier may need to be complemented by “additional identifying reference data”.

The consultation document covers the following two issues:

  • What is the most suitable unique product identifier to be used for compliance with the transparency requirements applicable to in-scope OTC derivatives.
  • Are there any ‘additional identifying reference data’ to be considered in addition to the unique product identifier.

The deadline for feedback to the consultation document is 9 January 2024.