The Derivatives Service Bureau (DSB) published the Industry Consultation Final Report relating to the OTC International Securities Identification Number (ISIN), the Classification Financial Instrument code (CFI) and the UPI service provision.
The industry consultation process complements the ongoing work of the DSB’s industry representation groups (IRG) and enables stakeholders and market participants to contribute towards the evolution of the DSB service by providing feedback on specific topics. For the first time, this year’s consultation includes the new UPI Service, which is particularly pertinent as G20 regulatory reporting mandates take effect throughout 2024 and 2025.
The Final Report summarizes the feedback from industry and the IRGs on topics including proposed enhancements for automation of existing processes and tooling with regards to Data Leakage Prevention, Data Classification and Data Labelling and moving forward with a combined Governance, Risk & Compliance and Third-party Risk Management tool.
The report noted that DSB implemented controls, mainly on a manual basis, for data classification and labelling. Data Leakage Prevention (DLP) controls are configured and require enhancement and automation to keep up with the increased cyber threat. Threat actors have become more advanced and sophisticated in addition to artificial intelligence (AI) providing new risks and opportunities for attackers and defenders.
“Investing in AI-powered protective tooling will help to address the increased cyber risk and potential future attacks which have grown because of the increased global visibility of the DSB since the UPI go live,” according to DSB.
Industry was asked if they support the proposed enhancements for automation of existing processes and tooling to mitigate against the increased cyber threat risk. Responses were supportive of the proposal, however one respondent felt the cost of this work should already be covered by existing fees.
The final report also provides insight on the next actions for creation of an equitable set of terms and fee model for intermediaries for all user types and changes regarding the provision of the UPI as part of the OTC ISIN Service. Additionally, the next steps are outlined on the Traded on a Trading Venue (ToTV) Service as a part of cost recovery, and the continuation of the Global Agile Architecture program of DSB’s work.
Emma Kalliomaki, managing director of ANNA and the DSB, said in a statement: “We would like to extend our gratitude to the industry for their participation in this year’s consultation. Stakeholder feedback is vital in understanding the industry’s drive for change across functionality, user types, fair cost apportionment, and the overall delivery of services that best serve evolving requirements”.