DSB seeks views on UPI fees

The Derivatives Service Bureau (DSB), founded by the Association of National Numbering Agencies (ANNA), to facilitate the allocation and maintenance of ISINs, CFIs and FISNs for OTC derivatives, is calling on industry to respond to a first consultation on the fee model principles underpinning the Unique Product Identifier (UPI) service, which opened this week.

The DSB urges market participants required to report to trade repositories anywhere in the world, and will be mandated to incorporate the UPI into their workflows, to review and respond to the consultation, so that a broad spectrum of views can be reflected in the service that is introduced in 2022. Because such firms will need to access, integrate, create, and consume UPI data, the DSB is actively encouraging industry to participate in shaping the service.

The consultation will examine topics such as expectations around UPI adoption and the estimated number of users, the types of users, the use of workflows, cost allocation processes, duration of the initial user agreements, the proposed invoicing methodology and more. The UPI goes beyond the existing DSB service, as the scope of the UPI is expected to be much broader than the scope of regulations currently addressed by the DSB’s OTC ISIN service. There will, therefore, also be new users of the UPI who may not be as familiar with the DSB’s processes. The DSB encourages all such firms to get involved at the earliest opportunity in the consultation.

The outcome of the consultation will be fundamental to laying the groundwork for how the UPI service and its fee model will be structured once it goes live. The consultation process will also help shape how to set fees, who they are applicable to, and the related functionality for the variety of anticipated UPI users.

Emma Kalliomaki, Managing Director of ANNA and the DSB, says: “UPIs will have a global footprint, and so we are looking to obtain the broadest range of views in response to our consultation process.  Although the service is not being introduced until 2022, now is the time for industry to get involved in the preparations so that we cater for the widest range of interests when shaping the UPI service for stakeholders.”

Malavika Solanki, a member of the DSB Management Team, says: “The DSB has already been collaborating with industry participants through the DSB Product Committee and the Technology Advisory Committee to leverage as much of the existing infrastructure and architecture as feasible, while recognising the unique needs of the UPI service. The DSB has been in close communication with a range of market actors to ensure that the UPI service meets the needs of our stakeholders. If your institution reports to a trade repository, we would like to hear from you, as we wish to gather views from institutions of all sizes.”

In 2019, the FSB announced its decision to designate the DSB as the sole service provider for the future UPI system, performing the function of issuer of UPIs as well as operator of the UPI reference data library. For more information please do visit our website on UPI. The first consultation ends 5 March, 2021. The second Industry Consultation starts 10 May and ends 9 July, with the publication of the Final Consultation paper due on 9 September, 2021.