On 13 March 2017, the Financial Stability Board ("FSB") began a consultation on draft governance arrangements for the Unique Transaction Identifier ("UTI"). The UTI is a critical element for the production and sharing of global aggregated derivatives reporting data. The purpose of the global UTI would be to uniquely identify each OTC derivative transaction required by authorities to be reported to trade repositories, thus minimising the potential for the same transaction to be counted more than once. Numerous countries have implemented legislative and regulatory requirements for the reporting of OTC derivatives aimed at improving transparency, mitigating systemic risk and preventing market abuse. To date, 26 trade repositories have been established in 16 countries.

The Committee on Payments and Market Infrastructures ("CPMI") and the International Organization of Securities Commissions ("IOSCO") published Technical Guidance on the harmonisation of the Unique Transaction Identifier on 28 February 2017. That Guidance has implications for the governance of the UTI because it envisages that the UTI will be generated by a wide range of entities in a decentralised way and that there is not likely to be a requirement for a central registry for those entities.

The FSB consultation paper proposes key criteria for assessing UTI governance arrangements, outlines potential governance functions and proposes governance options for UTI governance. The consultation closes on 5 May 2017. The FSB intends to adopt recommendations on UTI governance arrangements later in 2017. Additionally, the FSB will publish proposed governance arrangements for Unique Product Identifiers ("UPI") once the UPI Technical Guidance is published by the CPMI and IOSCO, currently expected to be published in Q2 2017.

The FSB's consultation paper can be accessed here:

http://www.fsb.org/wp-content/uploads/Proposed-governance-arrangements-for-the-unique-transaction-identifier-UTI.pdf?_sm_au_=iVVH7SZ6qZ1wDsMj

The CPMI/IOSCO UTI Guidance can be accessed here:

http://finreg.shearman.com/final-global-guidance-on-unique-transaction-ident

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