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An ISDA whitepaper titled "The Future of Derivatives
Processing and Market Infrastructure" outlined a set of
principles to standardize derivatives market data, documentation
and processing. The principles are a response to the complexity in
the current derivatives ecosystem resulting from the need to meet a
number of different and varying deadlines set by regulators across
the globe.
The whitepaper includes the following arguments:
Data: "a robust, granular, multi-use product
identifier with strong governance based on an open-source
infrastructure would remove many systemic inefficiencies and
further promote transparency."
Documentation: standardization and digitization of the
"suite of existing ISDA documentation" would promote
efficient processing.
Processes: a review of business and collateral
management processes "to aid compliance with new rules on
margining for non-cleared derivatives" would reduce cost and
inefficiency.
The authors of the whitepaper urge industry participants to
"collaborate effectively across all sectors – market
participants and their representatives, infrastructures and
regulators" and "further explore the role of existing and
new technology." They propose that ISDA:
assess the current post-trade infrastructure and processes to
expose inefficiencies and develop a mechanism to assist members in
identifying, prioritizing and developing near-term solutions;
coordinate the development of a plan for the creation of common
domain models for the derivatives market by the end of 2016;
work with industry stakeholders to identify a venue that can be
tasked with creating an open-source repository (or repositories)
for regulatory technology requirements; and
collaborate with other trade associations to promote the
whitepaper's initiatives and, in particular, explore
opportunities to leverage advances in technology.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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