London, 2 December 2013 Trayport®, a leading provider of energy trading solutions to traders, brokers and exchanges worldwide, today announced the launch of its whitepaper Managing Unique Trade Identifier (UTI) Generation, Communication and Matching in the context of EMIR and REMIT Regulations. The whitepaper discusses some of the challenges faced by trading counterparts in generating, exchanging and matching UTIs. It also outlines Trayport's solution to solve this issue for both historical transactions and future trades.
The introduction of EMIR and REMIT regulations is predicated on the ability of trading counterparts to allocate a UTI to each transaction for both on-going business and historical data subject to reporting obligations.
Although on the surface the concept may appear simple, it poses a significant challenge. It will require counterparts to coordinate workflows, especially in commodities markets where a significant percentage of OTC trading is based on non-standard contracts negotiated bilaterally rather than on a common platform. The automated generation of UTIs for bilaterally negotiated trades would significantly reduce the burden on counterparts.
Dan Smith, Head of Corporate Development at Trayport, said "There are two areas of relevance for UTIs in the context of the impending introduction of EMIR and REMIT regulations. The generation of UTIs for reporting trades entered into starting from 12 February 2014 and the backloading of existing trades. Reporting under EMIR covers concluded derivatives contracts which were entered into before 16 August 2012 and remain outstanding on that date or those that are entered into on or after 16 August 2012."
He added "The ideal UTI solution should be specifically designed to support bilateral and off platform trades. This is where the seller must generate and agree the UTI with their counterparty before reporting the trade. Doing this as close to the point of execution as possible reduces the risk of mismatches and improves operational efficiencies."