Data standardisation continues to be a focus for the OTC derivatives industry as an integral element of initiatives to support both operational efficiency and harmonisation in various pre- and post-trade processes. DSB, part of ANNA and the facilitator of both the allocation and maintenance of numbers, codes and short names has announced its yearly consultation outlining its service provision for 2023 is available. In a quick view, James Haskell, Management Team DSB, gives DerivSource and update on this consultation ahead of its deadline for comments at the end of May.
Q. Why does the Derivatives Service Bureau (DSB) publish a consultation each year? Why is the consultation so important?
A. The annual industry consultation is instrumental in shaping an operating model that helps bring efficiency and harmonisation to the market. Collaboration with stakeholders remains at the core of the DSB principles, and we value all feedback provided through the consultation process and via our industry representation groups.
Q. What are the main areas of focus for the OTC ISIN and CFI service-related consultation this year?
A.The document seeks to present information for market participants’ review and feedback, with the consultation focusing on a range of questions; key areas of focus are:
- The transformation of the technical infrastructure following on from the Multi-cloud and Multi-region consultation work carried out 2021. The initial delivery phase will introduce a new governance model that will put the Technology Advisory Committee (TAC) in control over the prioritisation of the transformation plan. Deliverables for 2023 will be agreed during 2022.
- Improvements to the Graphical interface to improve the user experience, through improvements to the UI and search service. The DSB has received feedback that many end users do not have the professional support to enable them to run queries via the GUI, as the current search facility uses a query script which is designed for use by IT professionals and developers.
- Rationalising connectivity options available within the cost recovery service. The VPN connectivity service which is funded as part of cost recovery is used by a very small number of ISIN clients. We would like to get industries opinion as to whether this should continue to be funded by cost recovery.
- Seeking industry interest in the use of Client Onboarding and Support Platform (COSP) for ISIN users, giving greater control to the users in managing their use of the ISIN service. The ability for ISIN users to have greater control will benefit them from a controls perspective, they will have real time access to understand who in their organisation has access to the ISIN service and add or remove people as they wish.
The review of our current operational toolsets to ensure we have the ability to automate processes and procedures which will reduce risks to the platform through human error. The DSB is constantly looking to improve its operational controls and automating through the use of enhanced tools would significantly help in the DSB’s overall control position. The DSB is proposing to work with the TAC to undertake a detailed review of its enterprise tooling estate, to create a proposal to the TAC on how to mitigate cyber and operational risks by strengthening controls and improving visibility, automation and transparency. Outside of the functional elements there are 2 key drivers for the focus:
- Risk Reduction – With increasing focus on cyber-threats to critical market infrastructures the DSB is constantly looking to improve its management of risks and controls, the continuation of the cloud work, reviews of tooling and the use of COSP all go improving the overall risk position of the DSB
- User Experience – The DSB will wherever possible look to respond to direct user feedback.
- Platform Scalability – The number of ISIN’s in the database continues to grow, as does the number of searches and creates, the continuation of the cloud work looks to position the DSB in a much stronger position to scale quickly and cost effectively.
Q. The consultation paper seeks the opinions from the industry on whether DSB should continue to offer Virtual Private Networking connectivity as part of the cost recovery service and on the roll-out of the Client Onboarding and Support Platform (COSP) to OTC ISIN Users. Can you explain briefly what this is and why you are asking if this should continue?
A. The DSB is currently implementing the Client Onboarding and Support Platform (COSP) to provide fee-paying Unique Product Identifier (UPI) users with a streamlined and scalable on-boarding and user management self-service portal for administration of their UPI Services. When the COSP and UPI Service are launched, new and existing users of the OTC ISIN Service will continue to use the existing manual OTC International Securities Identification Number (ISIN) processes to onboard and manage their relationship with the DSB. The DSB welcomes any feedback from industry on the potential roll-out of the COSP to OTC ISIN users.
Virtual Private Network (VPN) connectivity provides users with the option to establish a secure connection to the DSB over the internet. The solution implemented is expensive to run and is being paid for by all fee-paying users of the service, even though only a few users are actually using the service.
Q. When the consultation period ends, what happens next for DSB?
A. Next steps for the DSB post the Publication of DSB Consultation Paper (CP) on Fri 29 Apr 2022 are first, the feedback is assessed (including by the DSB’s Technology Advisory Committee – TAC) and incorporated into the Final Consultation Report published Thu 30 Jun 2022. The Final Report is also reviewed by the DSB Board and is scheduled for analysis and or implementation.
*For more information on the 2023 industry consultation paper please go to the DSB website.