The Derivatives Service Bureau Limited (DSB) has been designated as a unique product identifier (UPIs) and product classification system by the CFTC. With DSB, the Commission is expecting to bring more integrity to the market.

“The order represents another important milestone in the Commission’s long-running efforts to harmonize and standardize the swaps data elements required to be reported under the Commission’s regulations with those required to be reported by authorities in other jurisdictions,” said Vince McGonagle, Director of the Division of Market Oversight. 

The Commission is also expecting that the use of the DSB’s UPIs will increase transparency in the swaps market, which will enable the Commission to fulfill its regulatory responsibilities. The system will also assist in the real-time public reporting of swap transactions and pricing data. 

“By increasing visibility into swap markets through real-time public reporting and swap data repository reporting, the Commission brought light to what was previously an opaque market with hidden risk.”

Christy Goldsmith Romero, CFTC Commissioner

Registered entities and swap counterparties need to start using the DSB UPIs for swaps in the credit, equity, foreign exchange, and interest rate asset classes before January 29, 2024. Otherwise, they won’t comply with certain Commission swap recordkeeping and reporting requirements.

Increase transparency

The CFTC Commissioner Christy Goldsmith Romero welcomed the prospect of increased transparency in swap markets.

“By increasing visibility into swap markets through real-time public reporting and swap data repository reporting, the Commission brought light to what was previously an opaque market with hidden risk. Swap data reporting increases regulatory insight into swap market activity, which is necessary to promote market integrity”, she said in a statement.

“Real-time public reporting also promotes transparency and price discovery by making swap transaction and pricing information publicly available.”

The Commission will soon publish the UPI-related modifications to Parts 43 and 45 Technical Specification here.