OFR_2016_Financial-Stability-Report

collect transaction-level data. Others call for specific aggregated data.
Regulators do not consistently use data standards or common standards,
including for entities, products, or transactions. These factors make compliance
more complex for firms and slow the integration of data.
Derivatives
The Group of 20 (G-20) nations said in 2009 that over-the-counter (OTC)
derivatives transactions globally should be reported to data repositories (see
FSB, 2014). But regulators still cannot get a full picture of the risks. There
are no consistent standards for reporting the data. Lack of standards prevents
aggregating and analyzing system-wide risk.
Each regulator developed its own disclosure requirements. Some did
not explicitly state all trade terms required, which left the interpretation to
repositories and market participants. Regulators globally now better understand
that they must commit to common data requirements and adopt clear
definitions of trade terms. They are now working to set specific requirements
for how trade repositories gather, structure, and validate data.
The OFR, CFTC, Federal Reserve, and SEC are part of the international
Working Group for Harmonization of Key OTC Derivatives Data
Elements. This group’s activities are an important component of OTC
derivatives markets reform. Work focuses on three efforts: (1) defining and
standardizing a unique product identifier, (2) defining and standardizing
a unique transaction identifier, and (3) standardizing more than 80 data
elements critical for data aggregation and risk analysis, such as settlement
methods, valuation dates, and notional amounts (see BIS and IOSCO,
2015a; BIS and IOSCO, 2015b; BIS and IOSCO, 2016b).
The Group of 20 nations
said in 2009 that overthe-counter
derivatives
transactions globally
should be reported to
data repositories. But
regulators still cannot
get a full picture of the
risks.
Pension Funds
Pension funds are typically long-term investors. They are a major source of
stable funding for capital markets. In recent years, low interest rates have put
pressure on pension funds to increase their allocations to higher-yielding
asset classes, such as alternative assets.
Regulatory data reporting differs between private and public pension
funds. Private pension funds are required to file data annually on Form
5500. In July 2016, the agencies that collect the data proposed modifying
that form to better capture information on alternative investments, hardto-value
assets, investments through collective investment vehicles, complex
derivatives, and securities lending activities. The proposed rule would also
require reporting data in a structured format and would improve analysis of
investments across funds.
Key Threats to Financial Stability 83