Industry looks to curb ISIN complications

Industry group is aiming to create a single standard identifier for OTC derivatives.

Industry participants are looking at tackling an outstanding issue from European regulations on identifiers for OTC derivatives.

FIX Trading Community has joined up with the International Organisation for Standardisation (ISO) to determine the rules for the allocation of the International Securities Identification Numbers (ISIN) under MiFID II.

Industry experts have previously claimed that the application of ISINs to OTC derivatives would be near impossible due to the complexity of the products.

Under new rules, equities, bonds and derivatives trades will all need an ISIN.

Independent standards body FIX will now document a set of best practices as well as sponsoring the project.

The study aims to go beyond requirements set out in ESMA regulations and include the creation of a single standard identifier for OTC derivatives that can lead to increased operational efficiency, improved risk management and more transparency and regulators across several jurisdictions.

“Given the regulatory mandate for the creation of unique product identifiers for derivatives, FIX is delighted to play its part in ensuring a positive engagement between industry and regulators to ensure an optimal solution for all stakeholders,” said Jim Northey, senior consultant and member of the ISO study group.

* Standfirst was amended to show FIX is working with ISO to create a single identifier for OTC derivatives, as per the request of FIX.*