MFA White Papers

MFA, Trade Associations Jointly Publish Paper on Improving Derivatives Transparency

Posted on April 13, 2016

MFA worked with 12 other trade associations to jointly publish a paper titled “Improving Derivatives Transparency: The Merits of an Entity-based Reporting Framework”; which encourages regulators to adopt on a harmonized, global basis entity-based, single-sided reporting regime for derivatives.

Derivatives Transparency

A copy of the white paper is available here or by clicking on the image above.

In particular, in the paper, the trade associations explain that an entity-based reporting regime would benefit the market by:

  1. Reducing the cost and burden of transaction reporting currently placed on end users;
  2. Eliminating the duplication and replication of other regulatory requirements;
  3. Streamlining and clarifying reporting obligations to improve the quality and accuracy of reported transactional data; and
  4. Making high-level, multi-jurisdictional harmonization of reporting requirements easier and more effective.

In conclusion, the paper recommends that the next steps should be as follows:

  • An entity-based reporting framework should be adopted across jurisdictions.
  • Existing processes, and not dual-sided reporting, should be used to identify mismatches in trade terms.
  • A tiebreaker methodology for determining the responsible reporting party should be implemented consistently.
  • Legal responsibility for non-reporting counterparties to verify trade reports should be removed.
  • Greater focus should be placed on global data harmonization efforts.