Emir Refit UPI –

In this blog we take a look at the newly introduced field UPI. ANNA DSB defines UPI as “UPI stands for ‘Unique Product Identifier’ and is designed to facilitate effective aggregation of over-the-counter (OTC) derivatives transaction reports on a global basis”.

A Unique Product Identifier (UPI) is a unique code that is assigned to each over-the-counter (OTC) derivatives contract. It consists of a combination of letters, numbers, and symbols that uniquely identifies each contract. The UPI is intended to be used by regulators to identify and track OTC derivatives contracts in order to improve transparency and reduce systemic risk.

The inclusion of the UPI in EMIR and other derivative reporting regimes such as MAS, ASIC, and CFTC is a result of a new set of shared data elements (CDEs) being introduced to harmonize regulations across the world.

UPI is one of the key requirements of EMIR Refit UPI and is one of the key challenges industry is facing.

Why is UPI important

The lack of a standard product identification system has been a major challenge for regulators in monitoring OTC derivatives markets. The UPI will help to address this challenge by providing a standardized, globally recognized product identification system that can be used by regulators to monitor and track OTC derivatives contracts. This will enable regulators to better monitor and manage systemic risks in the derivatives markets.

The UPI is also important for market participants, as it will facilitate reporting and reduce the reporting burden on firms. By providing a standardized product identifier, the UPI will enable firms to easily identify and report OTC derivatives contracts to regulators, reducing the need for manual intervention and the risk of errors in reporting.

The introduction of the UPI field under EMIR REFIT (UPI)is an important step towards improving transparency and reducing systemic risk in the derivatives markets. The UPI will provide a standardized, globally recognized product identification system that can be used by regulators to monitor and track OTC derivatives contracts. By facilitating reporting and reducing the reporting burden on firms, the UPI will also help to reduce operational costs and the risk of errors in reporting. It is important for market participants to be aware of the UPI requirement and to prepare for its implementation in order to comply with EMIR REFIT (UPI) reporting requirements.

Operational and Technology Impact

Firms will need to connect with ANNA DSB for UPI lookup. ANNA DSB has various connectivity levels. Where a firm is not a manufacturer of the instrument, Search only API will be sufficient to obtain UPI along with other identifiers like ISINs.  Alternatively firms can obtain UPI via middleware providers like Reg-X optimising technology architecture and potentially saving development and support costs.