Best Reference Data Newcomer: Derivatives Service Bureau

The Derivatives Service Bureau (DSB) wins this year’s award for Best Reference Data Newcomer for its collaborative efforts with the over-the-counter (OTC) derivatives industry. DSB helps market participants meet European regulatory reporting requirements through its International Securities Identification Numbers (ISINs) generator solution and other initiatives.

DSB offers a fully automated platform that allows users to create OTC derivatives ISINs and obtain associated reference data. The company was established by the Association of National Numbering Agencies in 2017 in response to the European regulatory mandate for ISINs to be used for uniquely identifying and reporting OTC derivatives under the revised Markets in Financial Instruments Directive (Mifid II), which came into effect on January 3, 2018.

“The DSB’s OTC ISIN solution was fundamental for participants trading OTC derivatives to meet their Mifid II reference data reporting obligations,” says Malavika Solanki, a member of the DSB management team. “Through extensive collaborative work with market participants, regulators and other standards bodies, DSB delivered the OTC ISIN solution under budget and three months ahead of schedule.”

The first users for the generation of ISINs were onboarded in October 2017, marking the beginning of a global OTC ISIN data archive that also contains Classification of Financial Instruments, Financial Instrument Short Name and other associated reference data. Users can access the service either through a web interface or via direct integration to their front-office systems.

“Since the start of 2018, the industry has rapidly adopted the service to meet other regulatory reporting needs in addition to the original Regulatory Technical Standard (RTS)‑23 requirement—including Mifid II’s RTS‑2 and RTS‑22 reporting requirements—and European Market Infrastructure Regulation level III reporting,” Solanki says. 

The platform was originally intended for use for standardized OTC derivatives but, at the request of industry participants, DSB has expanded its offering to include 12 non-standard templates and three multicommodity exotic templates to support a broader spectrum of instruments traded by banks and asset managers.

Today, trading venues, banks and the buy side are able to use DSB-generated data instead of having to maintain complex algorithms to generate bespoke identifiers, and the service is used by 2,000 users spanning almost 400 institutions in 33 countries. 

In a further endorsement of DSB’s work, the Financial Stability Board announced in May that it had selected the firm to be the service provider for the future Unique Product Identifier (UPI) system. As the sole issuer of UPI codes, which will identify
the product in OTC derivatives transaction reporting data, DSB will also act as operator of the UPI reference data library. 

Read more about the Inside Market Data & Inside Reference Data Awards 2019 winners