OTC Derivatives Regulators' Forum Subgroup Descriptions
The OTC Derivatives Regulators' Forum (ODRF) has organized several subgroups to carry out specific work to support its objectives. Below is a summary of some of the subgroups that have been formed and the scope of each group's work.
Plain Language Summaries
Regulators in the ODRF seek to obtain a common understanding of the operations of and services being provided by OTC derivatives central counterparties (CCPs) and trade repositories (TRs) that serve the global market. The purpose of this subgroup is to develop outlines for CCPs and TRs to use in drafting "plain language summaries" (PLS) of their operations and services. The PLS subgroup works with the primary supervisors of OTC derivatives CCPs and TRs that are operational in the market to facilitate completion of the summaries. The plain language summaries are shared with the authorities that participate in the ODRF. The plain language summaries are updated on a periodic basis to ensure they reflect the most current information. Available below are the outlines for CCPs that provide credit derivatives and interest rate derivatives clearing services, as well as trade repositories.
Outline for Credit Derivatives CCPs
Outline for Interest Rate Derivatives CCPs
Outline for OTC Derivatives Trade Repositories
Trade Repository Subgroups
Credit, Rates and Equity Trade Repository Subgroups
Three subgroups have been established to work with the industry to articulate the data and functionality sought from trade repositories that have been established to register OTC derivatives data for credit, rates and equity derivatives. Each trade repository subgroup will develop expectations regarding the data that authorities would like to see registered in the respective repositories, and the data that in turn should be made available to regulators. Specifically, the subgroups will determine the periodic, numerical data elements and attributes and specify data templates that represent, in a conceptual fashion, which aggregate and participant data should be reported to the public and to various types of authorities. The subgroups will also aim to provide guidance that reflects common expectations across the authorities with regards to the nature, frequency and origin of the data to be recorded and reported. The subgroups will liaise with the industry designated repository working/implementation groups and TR service providers as functionality is developed and implemented.
Trade Repository Functionality Outline
Trade Repository Data Concepts and Vocabulary
Previous ODRF Work on Trade Repository Data
Four other subgroups had been previously launched to review specific matters related to trade repository data needs and collection. The work of these subgroups have informed the ODRF and subsequently incorporated into the work of the three subgroups on the credit, rates and equity trade repositories. A brief description of the previous subgroups is provided below.
Informational Needs of Market Regulators: This subgroup considered the specific informational needs of regulators whose mandates entail market-wide scope, in contrast to regulators with authority over specific market participants. The primary objective of this subgroup was to determine to what extent the current working documents address or do not address the informational needs of "market regulators" and to address any gaps through further definitions or clarification of existing definitions.
Prioritization of Additional Data Reporting Items: This subgroup worked to define and prioritize various items that were not supported on CDS TR(s) and either (i) provide further clarification or refinement to articulating information needs and collectively pursue; or (ii) determine that it may not necessarily be feasible to implement the information request. The primary objective for the subgroup was to ensure that the proposed items are properly catalogued, discussed, and refined, with an eye either to prioritize them as development requests for CDS TR(s) or to table them, particularly if it would be more feasible to achieve the underlying regulatory objectives outside of the data reporting process.
"Business Purpose" Information: The purpose of this subgroup was to explore the feasibility of identifying the "business purpose" of transactions maintained in centralized infrastructures, including CCPs and trade repositories. Some of the challenges for the subgroup sought to address included: (i) arriving at generally accepted definitions that could be implemented and consistently used industry-wide; (ii) determining how such information might be captured at trade execution; (iii) accounting for the possibility that the purpose of a transaction might change over time; (iv) mapping generic terms for data submission; and (v) determining how to classify legacy transactions. The subgroup considered these issues, and specifically worked to: (i) define the regulatory purpose and objectives in obtaining such information; (ii) explore, evaluate, and propose approaches to collecting "business purpose" information; (iii) explore and report on potential alternate approaches to achieving the regulatory objectives (e.g. classifying transactions by originating "desk ID" or business unit was suggested as one possibility); and (iv) recommending courses of action, as appropriate, for the ODRF.
Data Reporting Formats, Delivery Mechanisms, and Aggregation: The primary purpose of this subgroup was to address a number of practical issues related to the implementation of data reporting by CCPs and TRs. Some issues discussed include: (i) frequency of data generation; (ii) methods and longevity of storage; (iii) communication protocols; (iv) standardizing data formats across platforms; (v) push vs. pull mechanisms; (vi) regular data feeds vs. on-demand access; and (vii) how to aggregate data and report aggregate statistics across platforms. The objectives of this subgroup were to evaluate the various implementation options suggested by these issues, consider the range of preferences among regulators with respect to data formats and delivery, and recommend approaches to the ODRF for moving forward with the operational implementation of TR data reporting to relevant authorities.
Other Previous ODRF Work
Smaller and Local Participants' Access to CCPs: The primary objective was to review potential challenges and issues associated with smaller and local market participants seeking to access the services of central counterparties established to serve the global OTC derivatives market. As part of this work, the subgroup reviewed the CPSS-IOSCO Recommendations for Central Counterparties (RCCPs) to identify relevant sections of the RCCPs that might assist in addressing the access issues identified in the subgroup's analysis. The results of these efforts were provided to the chairs of the CPSS and IOSCO committees, for consideration as these committees review and revise international standards for financial market infrastructure.