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Actionable Strategies: Plugging ASIC’s Reporting Blackspots
Understanding the common pitfalls in derivative trade reporting, the “Blackspots” identified by ASIC (as discussed in our previous article), is crucial.
However, identifying the problems is only the first step. Building truly defensible reporting requires implementing effective strategies to address these weaknesses head-on.
This article will provide high-level strategies for tackling these common Blackspots. For actionable, step-by-step guidance on how to implement these strategies within your business, we also offer a separate, downloadable resource here.
Strategies for Addressing ASIC’s Identified Pitfalls
Addressing the specific pitfalls highlighted by ASIC demands a targeted and strategic approach. While robust governance provides the essential framework, implementing detailed strategies is key to operationalising defensible reporting.
Here are high-level strategies corresponding to the categories of pitfalls discussed:
A. Strategies for Data Quality and Identifier Challenges:
Strengthening data quality and ensuring accurate entity and product identifiers requires rigorous controls at the point of data capture and throughout the reporting workflow.
This involves implementing robust validation rules and clear processes for managing identifiers like LEIs and UPIs.
Detailed steps for enhancing data governance and quality controls can be found in our downloadable guide.
B. Strategies for Notional Challenges:
Tackling issues related to transaction terms and reconciliation, such as UTI pairing, notional calculations, and direction reporting, necessitates robust systems and processes.
Implementing automated checks, ensuring accurate mapping, and establishing consistent reconciliation procedures are key actions.
Our detailed guide provides actionable steps for managing these complexities effectively.
C. Strategies for Post-Trade Information Challenges:
Addressing pitfalls in post-trade information like stale valuations and missing collateral data requires establishing clear procedures and system capabilities for timely and accurate data capture and reporting.
Implementing automated monitoring is vital to identify and address missing or outdated information promptly.
Detailed guidance on improving post-trade reporting can be found in our downloadable resource.
The Role of Technology in Implementing Strategies
Leveraging appropriate technology is crucial for efficiently implementing these strategies and significantly reducing the risk of manual errors that contribute to the identified pitfalls.
A purpose-built reporting platform with integrated validation against ASIC TR rules before submission, advanced data transformation capabilities, and automation features can streamline processes and enhance data accuracy. Such technology provides the necessary tools to operationalise the strategies for addressing Blackspots effectively.
(Refer to Rule 2.2.4 of the ASIC Derivative Transaction Rules (Reporting) 2024 for format requirements)
The Importance of Internal Processes
These detailed strategies must be fully integrated into and supported by the robust governance framework discussed in the first article of this series (“The Governance Gap: Why Businesses Must Strengthen Derivative Reporting Assurance“).
Technology and strategy are most effective when underpinned by clear policies, well-defined procedures, effective oversight, and a culture of assurance within your business.
(Refer to RG 251.86-RG 251.91 for guidance on governance and oversight)
From Strategy to Action: Your Next Steps
Identifying the blackspots is the first step. The next is decisive action. To get the granular, step-by-step instructions your team needs to implement these strategies effectively, download our comprehensive guide.
Ensure your derivative trade reporting is defensible by implementing effective strategies.
How
Resolve DTR
Helps
If you’re looking for an expert partner to help you navigate these challenges and implement a robust reporting framework, our team at Resolve DTR is ready to help.
Learn more about our services or contact us to get started.
