Investment Operations

FSB Designates DSB as Unique Product Identifier (UPI) Service Provider

At its meeting last week in New York, the FSB designated the Derivatives Service Bureau (DSB) Ltd (DSB) as the service provider for the future UPI system, a key step in completing the governance framework for the UPI. As the sole issuer of UPI codes, DSB will also perform the function of operator of the UPI reference data library.

A UPI will be assigned to an over-the-counter (OTC) derivatives product and used for identifying the product in transaction reporting data. This will enable authorities to aggregate data on OTC derivatives transactions by product or by any UPI reference data element. Such aggregation will facilitate the effective use of OTC trade reporting data, including helping authorities assess systemic risk and detect market abuse.

The designation of DSB comes after the FSB publicly invited prospective UPI service providers in July 2018 to submit self-assessments.1 It is based on an assessment process undertaken by the FSB’s Working Group on Unique Transaction Identifier (UTI) and UPI Governance (GUUG), with advice from the Technical Assessment Sub-Group of the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) working group for the harmonization of key OTC derivatives data elements.

The FSB has also decided that the data standard for the UPI code and the UPI reference data elements will be set as international data standards and has identified the International Organization for Standardization (ISO) as the body responsible for publishing and maintaining these standards as international data standards.

In the coming period, the FSB, through the GUUG, said it will also engage with DSB and a range of authorities to ensure that DSB is subject to appropriately rigorous oversight arrangements and that its existing governance and consultative systems are adapted to the specific features of the UPI system, as set out in the FSB’s governance criteria and the CPMI and IOSCO technical guidance.