Derivatives industry calls for revamped trade reporting model

ISDA estimates costs of €100 million for European end-users due to the current trade reporting framework.

The association representing the global derivatives industry has called for a global adoption of an entity-based trade-reporting model.

Scott O’Malia, chief executive of the International Swaps and Derivatives Association (ISDA), said existing rules on trade reporting need to be changed to reduce costs for end-users and reduce complexity.

“ISDA and its partner associations believe that a workable, globally harmonised reporting system can only be achieved through the broad adoption of an entity-based framework,” said O’Malia.

Although regulators have adopted trade reporting globally, it has been implemented differently between regions.

In Europe both the buy-side and their sell-side partners are required to report the same trade, but in most cases they are reporting to different trade repositories. This dual-reporting framework has resulted in end-user costs in excess of €100 million, according to ISDA.

ISDA, along with 12 other global trading associations, have called for an entity-based framework for trade reporting whereby only one counterparty will be responsible to report.

European regulators are currently reviewing derivatives rules implemented under EMIR. 

In addition Mark Carney, chairman of the Financial Stability Board (FSB), also identified last year that global regulators have to shore up how they gather and analyse trade reporting data.