The Derivatives Service Bureau (DSB) announced a first round of industry consultation on fee model principles, which will examine topics such as expectations around UPI (unique product identifier) adoption and the estimated number of users, the types of users, the use of workflows, cost allocation processes, duration of the initial user agreements, the proposed invoicing methodology and more.
The consultation is aimed at market participants globally that are required to report to trade repositories and mandated to incorporate the UPI into workflows, and its outcome will be fundamental to laying the groundwork for how the UPI service and its fee model will be structured once it goes live. The consultation process will also help shape how to set fees, who they are applicable to, and the related functionality for the variety of anticipated UPI users.
The UPI goes beyond the existing DSB service, as the scope of the UPI is expected to be much broader than the scope of regulations currently addressed by the DSB’s OTC ISIN service. There will, therefore, also be new users of the UPI who may not be as familiar with the DSB’s processes. The DSB encourages all such firms to get involved at the earliest opportunity in the consultation.
Emma Kalliomaki, managing director of ANNA and the DSB, said in a statement: “UPIs will have a global footprint, and so we are looking to obtain the broadest range of views in response to our consultation process. Although the service is not being introduced until 2022, now is the time for industry to get involved in the preparations so that we cater for the widest range of interests when shaping the UPI service for stakeholders.”
Malavika Solanki, a member of the DSB Management Team, said in a statement: “The DSB has already been collaborating with industry participants through the DSB Product Committee and the Technology Advisory Committee to leverage as much of the existing infrastructure and architecture as feasible, while recognizing the unique needs of the UPI service. The DSB has been in close communication with a range of market actors to ensure that the UPI service meets the needs of our stakeholders. If your institution reports to a trade repository, we would like to hear from you, as we wish to gather views from institutions of all sizes.”
DSB was founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of ISINs, CFIs and FISNs for OTC derivatives. In 2019, the Financial Stability Board (FSB) announced its decision to designate the DSB as the sole service provider for the future UPI system, performing the function of issuer of UPIs as well as operator of the UPI reference data library. Implementation of the FSB’s technical guidance for UPIs is mandated for Q3 2022.
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