Do you need to report the same unique product identifier (UPI) as reported by your counterparty, under the ASIC Rules (which came into effect on 21 October)? No, you don’t.
The ASIC Technical Guidance confirms that reporting entities do not have to make sure that they report the same UPI which their counterparty has reported. However, ASIC makes suggestions as to reporting entities’ behaviours in the use of UPIs – encouraging adoption of common market practices so UPIs are used consistently and even clear at the outset of trading.
ASIC’s suggestions on UPI practices
In the ASIC Technical Guidance, they suggest that counterparties should adopt methods which encourage using the same UPI in transactions (paragraph 98).
These methods could include:
- using UPIs that have been assigned to a trade through infrastructures e.g. confirmation platforms and central clearing counterparties’ houses;
- Confirmations specifying the UPIs; or
- implementing commonly accepted market practices in firms relating to UPI communication amongst its trading counterparts.
Quick recap on UPIs
A UPI is a code used for OTC derivatives which are reported to a trade repository to help identify the relevant OTC derivative.
See below, a quick summary on how to deal with UPIs:
- To obtain a UPI – ANNA DSB provides information on how you can do this. Firms should use DSB’s UPI guidance on how to use their UPI service.
- Accuracy of a UPI – Rule 2.2.6 of the ASIC Rules requires all reasonable steps are taken to make sure that you report the most appropriate UPI for the transaction which is reportable.
- Firms should obtain and report the UPI with the same UPI asset class, instrument type, product and UPI characteristics for the relevant transaction.
- If there is no exact match, then firms should obtain and report the UPI which most closely matches the transaction.
For more information on UPIs, please see our article here.
To understand more about the ASIC Rules and the changes it created for Australian trade reporting, please see our article here.
How can TRAction assist with your trade reporting?
TRAction closely monitors trade reporting regimes and ensures our clients are compliant with the latest changes under any updates to the global regulations.
If you have any questions in relation to the ASIC trade reporting regime or other reporting regimes, please contact us.
