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In this episode, Vivian Lee, Product Owner for ASIC and MAS at DTCC’s Global Trade Repository Service, discusses the upcoming ASIC and MAS regulatory rewrites in the APAC region and where clients can focus their efforts ahead of the October 21 go-live.
Transcript:
Hello, this is Vivian Lee, Product Owner for ASIC and MAS at DTCC’s Global Trade Repository Service.
Today I would like to discuss the ASIC and MAS regulatory rewrites and where clients can focus their efforts to tackle some of the challenges they may face ahead.
After a successful go-live with the JFSA rewrite and ESMA refit in April, for a lot of our clients, their focus now turns towards APAC region for the ASIC and MAS rewrites mandated for October 21st this year.
Here we have two jurisdictions. For some of our clients they might be caught under one or two of the reporting regimes, but for most, they are in scope for reporting for both ASIC and MAS. Although a joint go-live can reduce operational hurdles through better resource planning, this is still by no means an easy feat.
With just a few months to go where are we now? What have the challenges been so far and where should our clients focus be on in the coming months? From our observations and feedback, the three key areas are UPI, XML and new data fields.
The introduction of the UPI is to provide regulators with a consistent view of systemic OTC derivative risks to aid supervising financial stability and detecting market abuse. The Derivatives Service Bureau (DSB) has been selected to be the sole UPI Service Provider.
While the intent of UPI is great, this is a new field which is not reported today and as a result, can present its own set of challenges. Firms will need the ability to create, ingest, store and report that UPI into the trade repository. Firms will need to become familiar with this product ID, understanding how it works, as it becomes a required field for submissions.
Next, XML, this is the new submission reporting format, very different from the CSV and FPML submission methods we been accustomed to over the last 10 years. For the global rewrites, XML will be the only method of submission as both CSV and FPML submission are no longer accepted. The ASIC and MAS regulators has also opted to receiving reports in XML only. Firms will need to have a solution in place to create these XML files, to be able to ingest our XML response files, and possibly the need build their internal reconciliation process around these XML end of day reports.
For the rewrites, there are a number New Data fields for ASIC and MAS reporting. The reportable fields have evolved into a new set of data fields with the CDE adoption and global harmonization intent. With over a 100 data fields for ASIC and MAS, do you have the relevant operational experience to map these data from your internal systems to populate these new fields? We know many firms are working on the data lineage for these new fields to ensure they have all the correct data elements, and this is a major task for firms right now.
In addition, the rewrite will introduce a new action type flow concept based on event timestamp. Clients will need to use specific combinations of action types and event types to drive the sequence of your submissions.
For some fields, new validation rules will be implemented to restrict the valid combinations of Action Type & Event Type which will drive the allowable sequence of submissions and guide the way you need to submit to make sure it makes sense. Firms may need to update their operational procedures and control to account for this.
Another topic I wanted to bring your attention is data migration. For ASIC and MAS rewrites we will be performing a one-time data migration exercise from your current trade state report to the XML trade state report for a select number of fields which have been identified by each regulator. This is to maintain the viability of legacy positions which might not be re-reported during the transition period after the go-live.
For the positions or field to be considered for the data migration exercise, the data value must conform to the XML standard, in terms of data type and format, else these positions will not be migrated, or the values might be migrated as blank or truncated. Firm will need to ensure they review their current production data and if necessary, clean up the data in your submissions ready for this migration exercise. Any data imperfectly migrated will need to be updated after the go-live.
This sounds like a lot, so what can client do to make sure they are better prepared?
I cannot stress enough the importance of testing. Test thoroughly with different trade scenarios and end to end. The Simulator released earlier this year – nine months before go-live, is a tool that allows you to validate your XML construct against the DTCC message specifications.
As promised, in April, we also opened for parallel UAT environments which allows firms to test against both the rewrite UAT code and the current production code six months before go-live. The UAT environment now allows for full testing workflow from submitting messages, getting validation responses, and reports for your reconciliation purposes.
Only through testing will you understand the potential reporting issue you could face on go-live and allow us enough time to review and address these queries in time for go-live.
If you haven’t yet, make sure you sign up to our Learning Centre to ensure you have access to the latest documents, such as message specifications, the functional change document, UGs, samples and more.
Onboard early to the DSB and start testing your UPI values, as I said earlier, UPI will be mandatory on every submission post go-live and will be validated for a value from the DSB database.
And lastly, make sure you participate in the data migration dry run exercise so you can get a view of the problematic positions or fields in the current production data and correct accordingly before go-live.
All in all, there are a lot of changes but remember that DTCC are here to help you, from reporting to connectivity to onboarding. Thank you for listening.