In a new blog post, the International Swaps and Derivatives Association (ISDA) reviews its work to automate derivatives reporting and reduce unnecessary data requirements, citing persistent inconsistencies and excessive implementation costs. In preparing a response to the US Commodity Futures Trading Commission (CFTC) and US Securities and Exchange Commission (SEC) consultation, it identified 43 of 177 examined data fields as candidates for removal. These fields provide no regulatory value, are not required in other jurisdictions or duplicate information already reported or available from reference sources. The update follows the recent launch of ISDA’s Digital Regulatory Reporting (DRR) Tracer Agent, which uses artificial intelligence (AI) to create a searchable, auditable record linking interpretation and coding decisions to regulatory requirements. DRR uses the Common Domain Model (CDM) to convert an agreed industry interpretation of reporting rules into executable code. It already covers CFTC and SEC requirements, providing a means for firms to implement changes consistently. Four additional AI agents are in development to translate reporting requirements into DRR code, generate CDM-compatible code from plain language prompts, make ISDA standards and definitions available digitally, and map firms’ internal data to the CDM. Industry working groups will continue to review and agree reporting interpretations, with AI supporting the translation of those judgments into code.
ISDA outlines reporting automation plans and case for removing 43 US derivatives reporting fields
The International Swaps and Derivatives Association identified 43 of 177 examined US derivatives reporting fields as candidates for removal because they are unnecessary or duplicative. Its reporting automation update also reviews the recently launched Tracer Agent and four additional artificial intelligence tools in development. Industry working groups will retain responsibility for agreeing reporting interpretations.