IMD & IRD Awards 2020: Best Reference Data Initiative—Derivatives Service Bureau

The collaborative efforts of the Derivatives Service Bureau (DSB) with the over-the-counter (OTC) derivatives industry converted the global numbering agency’s 2019 newcomer accolade into this year’s overall Best Reference Data Initiative award.

The DSB facilitates OTC derivatives pre- and post-trade regulatory reporting. Founded following the 2016 revised Markets in Financial Instruments Directive mandate for International Securities Identification Numbers (ISINs) to be used in uniquely identifying and reporting OTC derivatives, the company has since expanded, at the industry’s request, to serve reporting needs for the European Market Infrastructure Regulation and the Markets in Financial Instruments Regulation. Its fully automated platform allocates ISINs, Classifications of Financial Instruments and Financial Instrument Short Names, and allows users to obtain associated reference data. 

Over the past year, developments have included creating free-to-use open-access standardization tools to facilitate consistent regulatory reporting and implementing interbank offered rate reform-related changes. Malavika Solanki, a member of the DSB management team, outlines the new integrated templates that have been developed: “To support updated regulatory guidance regarding a key data element in OTC derivatives records, we created an integrated tenor calculation function within our templates, providing flexibility for users. We also made an open-source standardization tool available for users to easily calculate the tenor value on a standalone basis, facilitating their internal development and testing.”

Tackling and continually improving data alignment are fundamental drivers of the DSB’s evolution. Emma Kalliomaki, Association of National Numbering Agencies (ANNA) and DSB managing director, says: “The pressure of evolving regulatory obligations means firms need standardization and consistency across their data. Data alignment and consistency make identifiers much more easily transferable across regulatory reporting needs and internal use cases. Having been selected as sole service provider for the Financial Stability Board’s global Unique Product Identifier system, this focus on alignment and our ability to leverage synergies with the OTC ISIN will make it easier for firms to introduce this additional regulatory obligation in 2022. We will be ensuring these two services can work in harmony to service the needs of our broad user community.”

In addition to meeting regulatory reporting requirements, the DSB’s services are increasingly being used to drive operational efficiencies. “The additional functionality and features that we are collaboratively generating provide our users with significant workflow and process improvements,” Kalliomaki says.

Looking forward, Solanki says that “close collaboration with the industry will remain fundamental to how we continue to evolve,” as she highlights further enhancements to the DSB’s services. “While the OTC ISIN meets very specific regulatory requirements, users are also starting to leverage certain data elements contained within it for their own purposes. At users’ request, we are currently analysing whether and how elements contained within the OTC ISIN product definitions can be utilized to support other regulatory reporting purposes for example. We are also examining how we can enhance OTC ISIN records with additional data, leveraging ANNA and the Global Legal Entity Identifier Foundation’s open-source legal entity identifier–ISIN files.”

Read more about the Inside Market Data & Inside Reference Data Awards 2020 winners