Identifier Consultation Deadline Nears

The end of September marks the deadline for financial industry participants and data providers to respond to a consultation document issued by the Unique Trade Identifier (UTI) harmonization group-a joint initiative by the International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures-that aims to define the structure of the identifier and how it will be generated.

The UTI, issued by the European Securities and Markets Authority for over-the-counter derivatives transactions, can be subject to different approaches in different jurisdictions. The European Market Infrastructure Regulation requires a structured decision tree for the identifier's issuance whereas the US Dodd-Frank Act does not, for example. The harmonization group will try to reconcile this difference.

The group will also consider two possibilities for the structure of the UTI. First, embedding transaction elements such as counterparty legal entity identifiers and product identifications to give the UTI "intelligence," and, second, using very large random numbers generated by a counterparty to a transaction.

After collecting and analyzing responses to the consultation, the UTI harmonization group expects to issue final guidance on the identifier in early 2016.