A lot has been made about the data challenges of complying with MiFID II, but one major challenge has been largely overlooked: uniquely identifying OTC derivatives for reporting. While regulators, and MiFID II in particular, are concerned about the risk profiles of trades, identifying the characteristics of a swap trade for the purpose of determining its risk profile remains a challenge, according to Etrading Software’s Sassan Danesh, who serves as the co-chair of the FIX Reference Data Working Group on MiFID II. Speaking with TABB Group Partner and Global Head of Research and Consulting Anthony Perrotta, Danesh discusses the lack of international standardization, including a “taxonomy” for OTC derivatives; the operational challenges market makers face in pricing and risk managing their books as a result; and the efforts to harmonize global regulations.
To see the full interview, please click here.