CFTC Opens Discussions on Standard Structure for Global UTI

The US Commodity Futures Trading Commission (CFTC) has begun discussions with other regulators about the possibility of creating a standard structure for a global unique transaction identifier (UTI), and is also analyzing its own requirements for swap product identification.

The use of different identifiers to perform similar functions in different jurisdictions has created challenges for market participants, with the CFTC mandating the use of unique swap identifiers (USIs) as part of its implementation of the Dodd-Frank Act, while the European Securities and Markets Authority requires the reporting of its own unique trade identifier as part of its reforms of the derivatives markets.

During a speech at a conference hosted by Swift and the London School of Economics in London on March 25, Scott O'Malia, a commissioner at the CFTC, said regulators have now begun to explore the possibility of greater global standardization of the identifiers used.

O'Malia said "CFTC staff has begun a dialogue with other regulators to discuss the feasibility of a standard for the structure of a global UTI."

He explained the International Swaps and Derivatives Association has proposed a UTI structure that is based on the CFTC USI standard, but with deviations.

O'Malia also said the CFTC held its first "cross-divisional working group" meeting last week to discuss the regulatory body's own needs in relation to the identification of swaps products and the use of unique product identifiers (UPIs).

He said subject matter experts from each division of the CFTC are helping define the taxonomy requirements for identifying swaps products. The working group plans to focus first on the credit asset class and then the interest rate asset class.

O'Malia said the CFTC is coordinating its activities with those of other regulators, in the US and abroad, to facilitate dialogue about a standard for product identification.

On the subject of the legal entity identifier (LEI), O'Malia described international regulators as "well on their way to putting global LEIs into place."

The full text of O'Malia's speech can be found here.