The Derivatives Service Bureau (DSB) released the latest data on industry readiness for European UPI (Unique Product Identifier) regulatory reporting requirements, which are part of the EU EMIR Refit Regulations. The European Union will implement UPI reporting from 29 April 2024 as the second G20 jurisdiction, following the US who went live from 29 January 2024, and ahead of the UK effective date in September 2024.
The EU UPI reporting will be complementary to the existing ISIN for OTC derivative reporting, which is important to price transparency and market abuse detection under MiFIR, and for aggregating OTC derivatives data under EMIR. This means that the EU (and the UK) will be reporting the OTC ISIN where the EMIR scope aligns with MiFIR, with the UPI being reportable for those derivatives that are part of the broader scope of EMIR.
Due to the intentionally complementary design of the two identifiers, UPI data attributes and the UPI code itself are included in the OTC ISIN record. Organizations using the OTC ISIN can leverage established workflows and connectivity for integration of the UPI, ensuring global convergence and harmonization. This is an integral component of the EU’s approach, designed to establish cross-regulation consistency and lower reporting burdens for firms.
Overall, the DSB user onboarding data reveals that European organizations are prepared to meet their UPI regulatory requirements, having seen a steady increase in EU headquartered firms joining the service. Currently, 246 firms have subscribed to the UPI Service across various fee-paying user types, including 122 programmatic users.
This represents an increase of over 100 organizations subscribing to the UPI Service since the US compliance date. Among these organizations, banks constitute the largest entity group at 44%, with other participants such as trade execution platforms- SEF, clearing houses, brokerages, trade repositories, and data management providers also onboarded. Approximately 33% of the onboarded organizations have their headquarters based in the EU. Quarterly updates on UPI user numbers are available on the DSB website Fee Model Variables page.
Emma Kalliomaki, managing director of ANNA and the DSB, said in a statement: “This second UPI compliance milestone reflects the momentum of G20 jurisdictions fulfilling commitments made after the financial crisis, contributing to the ongoing efforts to enhance global systemic risk monitoring through the aggregation of OTC derivatives data.
“We have worked closely with stakeholders to ensure the OTC ISIN design is consistent and complementary with the UPI. As a result, the relationship between the two identifiers is being leveraged for the EU UPI implementation to ease integration and reduce the regulatory reporting burden on firms.”
As UPI reporting deadlines approach, firms can prepare for their reporting obligations by using the DSB’s scalable Client Onboarding and Support Platform. The platform enables timely onboarding to the UPI Service offering a range of efficient connectivity and service options that facilitate seamless access to UPIs across all products.
The UPI Service was launched on 16 October 2023 as a result of ongoing collaborative efforts involving industry stakeholders, global regulatory bodies, and the Derivatives Service Bureau (DSB), which serves as the UPI Service Provider. Since its launch, more than 1 million Unique Product Identifiers (UPIs) have been created and made accessible to users. UPIs are categorised by asset class, with volumes regularly reported.
The next jurisdiction to roll out UPI reporting will be the UK on 30 September 2024, followed by Australia and Singapore from 21 October 2024 and Japan from 7 April 2025. In addition, the Hong Kong authorities, HKMA and SFC, are consulting on the OTC derivatives reporting regime, proposing mandatory UPI reporting from 29 September 2025.