While global regulation of the derivatives markets has done much to collect data about formerly opaque transactions, the utility of that data remains questionable without a uniform global system of Unique Transaction Identifiers, that would facilitate greater understand of the data collected and the market activity it represents.
Global regulators and central bankers have proposed a common tagging system for off-exchange derivatives transactions to spot more easily which banks could be at risk in a market crisis. The International Organization of Securities Commissions (IOSCO) and the Committee of Payments and Market Infrastructures (CPMI) issued draft guidance for public consultation on Wednesday for a "unique transaction identifier" or UTI. A snapshot of derivatives positions would not only aid regulators in a crisis but also help them spot and tackle a build up in risky positions to avoid banks getting into difficulties in the first place. One official at a leading TR said the industry was facing costly, conflicting demands as market regulators want enough data to spot market abuses while central bankers want sufficient data for spotting risks to the broader financial system.