Eleven financial markets, investment and banking associations have publicly said they support the principles set out by the International Swaps and Derivatives Association (ISDA) to improve regulatory reporting standards for derivatives.

ISDA's principles call for the harmonisation of derivatives reporting requirements across borders and for wider adoption and further development of global data standards.

Specifically, the principles are:

• The harmonisation within and across borders of regulatory reporting requirements for derivative transactions;
• Policy-makers should embrace and adopt the use of open standards;
• Where global standards do not yet exist, market participants and regulators can collaborate and secure agreement on common solutions to improve consistency and cross-border harmonization;
• Laws or regulations that prevent policy-makers from appropriately accessing and sharing data across borders must be amended or repealed; and
• Reporting progress should be benchmarked.

According to a statement from ISDA, issued yesterday in New York, significant progress has been made in meeting a G-20 requirement for all derivatives to be reported to trade repositories to increase regulatory transparency. The statement continues: “However, a lack of standardisation and consistency in reporting requirements within and across jurisdictions has led to concerns about the quality of the data being reported. Poor data quality reduces the value of the data for regulators and limits their ability to fulfil supervisory responsibilities. Differences in reporting requirements also increase the cost and complexity for firms that have reporting obligations in multiple jurisdictions.”

The 11 associations say that:

• ISDA's data reporting principles will result in greater consistency in the content and format of the data being reported, further improving regulatory transparency;
• market participants will also benefit from greater specificity and harmonization in their reporting across multiple regimes;
similar principles will benefit global trade reporting requirements beyond derivatives; and
• lessons learned from derivatives reporting should be applied more broadly.

The signatory associations are:

1. the Australian Financial Market Association (AFMA),
2. the Alternative Investment Management Association (AIMA),
3. the British Bankers’ Association (BBA),
4. the German Investment Funds Association (BVI),
5. the European Fund and Asset Management Association (EFAMA),
6. the Futures Industry Association (FIA Global),
7. the Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association (GFMA),
8. ISDA,
9. the Managed Funds Association (MFA),
10. the Securities Industry and Financial Markets Association (SIFMA) and its Asset Management Group (SIFMA AMG),
11. and The Investment Association.