INTERNATIONAL: ISDA Launches New Industry Initiative for a Derivatives Product Identification Standard

Tuesday September 29 2015

The International Swaps and Derivatives Association, Inc. (ISDA) has launched a new industry data project, aimed at developing an open-source standard derivatives product identification system that can be applied consistently and comprehensively across all derivatives facilities, including trading venues, clearing houses, repositories and other infrastructures.

ISDA is overseeing the symbology project, which involves a consortium of buy- and sell-side market participants, vendors, platforms and trade associations. London-based capital markets technology consultancy Etrading Software is acting as project manager.

The initiative comes in response to a variety of regulatory changes, including the European Union’s revised Markets in Financial Instruments Directive/Regulation (MIFID II/MIFIR) and the US Securities and Exchange Commission’s (SEC) reporting rules, which require a standardized means of identifying derivatives instruments at a granular level. A common methodology for classifying and identifying derivatives instruments across all platforms will also cut complexity and costs for market participants that need to connect to multiple trading venues, and simplify the distribution of liquidity.

The consortium will initially work to produce globally standardized symbols for credit, rates and equity derivatives in 2015. This project leverages the work and existing initiatives that some participants have previously been involved in.

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