OTC Derivatives Rewrite Challenges

As firms plan ahead to meet the compliance requirement for the upcoming HKMA OTC Derivatives reporting Rewrite in second half of 2025, it is worth reviewing some of the challenges faced in MAS-ASIC Rewrite regulations.

Many of the rewrite rule changes are driven by the desire for regulators globally to have better data that can be aggregated in a uniform way, help to avoid double counting across regimes, and ultimately improve monitoring of systemic risk.

? UPI- Unclear requirements on sourcing Unique Product Identifier from Anna DSB for certain exotic instruments and certain Foreign exchange currency combinations.

There were issues observed for certain instruments and currency pairs which were traded only in APAC region and not traded in EU and US regions.

? Collateral Data-

?? 1. Obtaining the Initial Margin and Variation Margin Portfolio Codes and ensure uniqueness of both the portfolio codes for the Trade and collateral reports.

Refits from EU and US regions? required reporting of only Variation Margin Portfolio codes and not both IM and VM portfolio codes which made it a unique challenge to comply with the APAC Rewrite requirements.

? 2.? Reporting uncollateralized trades which require UTI to be reported in margin reports. UTI is not typically available in margin related source systems or in Clearing broker margin reports and hence require special logic to be built for enriching UTI.

? UTI- Source UTI for Asset Managers and Custodians

The buy side firms typically do not generate Global UTI and often because of single side reporting find it difficult to report Global Standards UTI for T+1 reporting.

? LEI and Entity Responsible for Reporting (DTCC GTR Field)- Ensure the LEI’s of the Fund, counterparties and Entity responsible for reporting pass the GTR GLIEF Validations.

?FX Swap reporting- Linking of FX Forward and FX Spot legs using Swap Link ID for reporting FX Swap trades to MAS.