ANNA Responses to ESMA Consultation Paper on Call for Evidence on a Comprehensive Approach for the Simplification of Financial Transaction Reporting

Brussels, 19th September: ANNA submitted its response to ESMA’s call for evidence on a comprehensive approach for the simplification of financial transaction reporting

The role of ANNA in the industry is best placed to advise ESMA on key challenges and preferred simplification option depending on reporting obligations, model and systems. The ANNA response focuses on the key principles relevant  across all options, proposing additional consideration to the mechanisms required to embed the stated principles in the future framework, principally international standards.

The first key principle is the preservation of information scope so that identifier standards can report the instrument identifier alone such as the ISIN which has been designed to support market abuse investigation and detection, embedded within it rather than requiring separate reporting of that information. Also how instruments that are similar in risk and characteristics can be reported in a consistent manner to make comparison easier for authorities, given the embedded data attributes.

The second key principle is to decrease overlaps and reduce reporting burden as each of the ISO financial services standards can be used independently and also be complementary in nature as a benefit for stakeholders. This is done through enabling consistent interpretation and validation, ensuring harmonization of the reference data, which already has attributes within the standard like the ISIN record. Also the first key principle provides the avoidance of separate reporting that decreases the overlap of reporting.

The third key principle is to ensure global alignment which ISO already fosters by the usage, harmonization and consensus-based approach of its global community. Since standards evolution is aligned with market evolution, each standard remains fit for purpose and aligned with market practice to minimize disruption and cost to stakeholders. Alongside the globally recognized identifiers that are developed and maintained within the ISO framework by DSB, the ISIN, UPI, CFI and FISN form an OTC derivative identifier framework for identifying, classifying and describing OTC derivatives.

The fourth key principle is the balance of cost with prior benefits as the existing infrastructure and workflows already built by industry and regulators, which are based on the use of ISIN across all asset classes, including for OTC derivatives, do not require any additional implementation costs for the continued use of ISIN.

Read the ANNA comment letter here.

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