The International Swaps and Derivatives Association (ISDA) has extended its Digital Regulatory Reporting (DRR) solution to cover new reporting rules in Canada.
The reporting tools have also been made compatible with a trade reporting messaging format used for North America reporting.
The revisions — scheduled for implementation on July 25 — are being implemented by the Canadian Securities Administrators (CSA). In advance of implementation, ISDA DRR code for the Canadian amendments is now freely available for market participants to review and test. This allows firms to implement changes to regulatory reporting requirements while reducing the risk of regulatory penalties for misreported data.
As part of the update, the ISDA DRR will enable firms to comply with the new Canadian reporting rules using Harmonized XML. Harmonized XML is a trade reporting message format developed by The Depository Trust & Clearing Corporation (DTCC). Once the DRR for the CSA rules is fully rolled out, ISDA will extend the use of Harmonized XML for reporting under the Commodity Futures Trading Commission’s (CFTC) swap data reporting rules.
The Canadian rules will be the seventh set of reporting requirements available on the ISDA DRR. It follows earlier launches to cover amendments in the US by the CFTC, Japan by the Financial Services Agency, the EU under the European Market Infrastructure Regulation (EMIR), the UK under UK EMIR, Australia by the Australian Securities and Investments Commission and Singapore by the Monetary Authority of Singapore. The ISDA DRR will also shortly be extended to cover rule changes in Hong Kong, starting in September. In total, ISDA has pledged to support 11 reporting rule sets in nine major jurisdictions.
“The latest extension of the ISDA DRR to cover rule changes by the CSA establishes a best practice for derivatives trade reporting in Canada. This aligns with our work in six other reporting jurisdictions, creating a global digital reporting solution that significantly increases the accuracy of reporting and reduces the potential for regulatory penalties, estimated at over $285 million globally so far,” Scott O’Malia, ISDA’s chief executive, said.
The ISDA DRR uses the Common Domain Model – an open-source data standard for financial products, trades and lifecycle events – to convert the industry interpretation into free, machine-executable code. That code can be used as the basis for implementing the rules or to validate that a firm’s interpretation is aligned with the industry reading.