The Financial Stability Board (FSB) has published a report following its study into the feasibility of various market options for a mechanism to produce and share global aggregated data.
The report compares three basic options for aggregating over-the-counter (OTC) derivatives trade repository data:
- option 1 – a physically centralised model;
- option 2 – a logically centralised model; and
- option 3 – the collection and aggregation by authorities themselves of raw data from trade repositories.
The report finds that options 1 and 2 are highly preferable to option 3 in order to ensure that authorities have access to the aggregated data they need in order to perform their mandates and meet the G20 objectives.
The report recommends the following next steps which will need to be taken irrespective of the particular aggregation model chosen:
- work to establish uniform global identifiers should be accelerated to ensure that OTC derivatives data can be adequately aggregated;
- international work should take place, involving a broad range of authorities and trade repositories, to develop global guidance on the harmonisation of data elements that are reported to trade repositories and are important to aggregation by authorities;
- work to develop and implement a global aggregation mechanism should not wait until the global identifiers are in place; and
- as part of the work leading to the implementation of the global aggregation mechanism, and before any formal project is launched, certain steps should be taken including: (i) study in more detail and address the legal and regulatory changes that would be needed to implement a global aggregation mechanism that would meet the range of authorities’ data access needs; (ii) further consideration of the appropriate governance structure of an aggregation mechanism; and (iii) a more detailed assessment of the potential costs beyond the initial discussion set out in the report.
View Feasibility study on approaches to aggregate OTC derivatives data, 19 September 2014