PLANNING FORJFSA TRADE REPORTING
RULE REWRITE
March 2023

The global trade reporting landscape is set for a shake up as the world’s most significant derivatives regulations are being revisited withan eye towards improved data quality and harmonized data standards.
In the Asia-Pacific (APAC) region, regulators are engaging with each other to coordinate their derivatives reporting rule changes -- or“rewrites” – adopting revised and new fields including CPMI-IOSCO’s critical data elements (CDE) like the unique product identifier (UPI)
and implementing the ISO 20022 XML standard, amongst other changes. Regulators in APAC are focused on bringing greater alignmenton the quality and accuracy of the reported data. They are also generally aligned on implementation timing with Japan targeting thego-live date on April 1, 2024, followed by Australia and Singapore with a common implementation date expected in Q4 2024.

INDUSTRY IMPACTS
Based on our experience, you may want to consider the following when evaluating your readiness for the upcoming Financial Services
Agency of Japan (JFSA) Rule Rewrite:●●●Front to back processes, data requirements and lineage
UPI implementation once it becomes available, including how UPIs will be exchanged at the point of trade execution and how theinformation will be propagated downstream
Re-reporting existing open positions (i.e. either transition from direct reporting to JFSA or upgrade of the existing open positions inthe trade repository) including data requirements under the new framework●

The impact of moving away from legacy messaging to ISO 20022 XML●Collateral systems and how they will support the added complexity of reporting the entire set of collateral fields proposed for rewrite●The need to create end-to-end test cases, including functional and technical specifications, to ensure readiness for compliance●The analysis, design and implementation of new business requirements and enhanced controls required to adapt to the new rule

●An appropriate control and incident management framework that is adjusted based on the rewrite requirements

LET US HELP YOU GET READY FOR THE UPCOMING GLOBAL REGULATORY CHANGES
Discover how DTCC, through our Global Trade Repository service (GTR), can help you address the significant data,technology, and resourcing challenges associated with updating your trade reporting infrastructure and control framework forcompliance with the JFSA Rule Rewrite.

REACH OUT TODAY1

SUBMITTING DATA INTOTHE TRADE REPOSITORYSUB TASKKEY CONSIDERATIONS●NEW TECHNICAL STANDARDS AND VALIDATION RULES●●CUTOVER TO THE NEW TECHNICAL STANDARDS●RESPONSE FILES●USE OF XML: ISO 20022●●TESTING●

2

The number of reportable fields now stands at 137, the final
total number will reach 139 fields when UPI and Delta are
introduced at a later date. Have you completed the necessary
gap analysis on the changes?
Do you have the relevant operational experience to map datafrom internal systems to appropriately populate these fields?
If not, have you considered engaging with externalconsultants?

JFSA indicated that all outstanding legacy transactions will
have to be fully populated and re-reported to traderepositories (TRs) by September 27, 2024. Do you have all
the relevant data to update historic trades into the latest
technical standards?

A standard set of error codes will be provided in response
files. What does this mean for your control framework if theTRs’ proprietary ACK/NACK codes are no longer used
post-go live? Does this mean your control framework willneed to be redesigned or rebuilt?

JFSA has mandated to adopt ISO 20022 XML as inboundfrom April 1, 2024. Have you considered how you are goingto generate XML files to submit into the TR?
Do you have sufficient experience in-house to implement themove to XML reporting?

It is critically important to conduct sufficient testing prior to
the go-live date in April 2024. GTR offers early access to avalidation Simulator (likely in Q3 2023) and UAT (likely in Q42023) for users to conduct testing well ahead of April 1, 2024.
Do you plan to create sufficient testing scenario to cover
your trading patterns?

COLLATERAL REPORTINGSUB TASK

KEY CONSIDERATIONS●COLLATERAL REPORTINGJFSA does not currently require reporting of collateral. Does
your system have the ability to report new collateral fields
being asked for rewrite?

END-OF-DAY REPORTS
SUB TASK

KEY CONSIDERATIONS●XML OR CSV REPORTING●●END-OF-DAY PARTICIPANT REPORTS

It is possible that TRs will not be able to provide a choice ofeither XML or CSV reports to reporting parties. If CSVreporting is the preference, is this good enough for yourinternal operational process such as reconciliation?
Have you considered any additional internal tooling youroperations teams may require?

While there are no SLA changes expected to the report
generation timings, reports are generally provided to you inthe early hours of the Japan day. With the earlier provision ofthese reports, is there any way that operational processes
can be enhanced (i.e., correct mismatches earlier in the day)?

KEY NEW FIELDSSUB TASK

KEY CONSIDERATIONS●EVENT TYPE VERSUS ACTION TYPEAND MANAGING LIFECYCLE EVENTS●●ACTION TYPE: REVIVE3JFSA indicated that firms must now indicate the action type
and the event type, which is a significant change to lifecycle
event management. Have you considered the implications toevent choreography?
The internal sources of these new event types may sit acrossmultiple applications. Have you mapped these event types toapplication sources and determined how these feed
reporting systems?

Whilst not a new field, the action type “revive” has been
added to provide counterparties with the ability to reopen
trades after being terminated or cancelled by mistake. Arechanges required in your reporting system to account forreviving a previously closed trade?

SUB TASKKEY CONSIDERATIONS
●UPI●

●

PRIOR UTI●

●

●LEI●

●

EVENT IDENTIFIER●ENTITY RESPONSIBLE FOR REPORTING●●

DIRECTION OF LEG 1 / LEG 2

4

In the long term, the Unique Product Identifier (UPI) should
simplify reporting and data aggregation as it reduces thenumber of reportable fields. Have you considered how youwill incorporate the UPI into reporting applications?
Have you coordinated with industry peers to agree on themethodology on how to obtain UPI and how to share UPI
with trading counterparties?
Prior Unique Trade Identifiers (UTIs) provide entities theability to link transactions. Is the prior UTI obtainable fortrades that must be upgraded to the latest technicalstandards?
Have you considered how you would link these transactions
and any impact of sourcing the prior UTIs?
Should prior UTI be used as temporary UTI if you are unable
to obtain a UTI in time for reporting?

LEI will be the mandatory identifier for CP1 and CP2 for JFSA
reporting upon rewrite. SWIFT BIC code is no longer
accepted.
Have you obtained LEI for your firm as well as your trading
counterparties?

The Event Identifier will be used to link trades that havebeen through an event such as a compression. Will all service
providers be able to provide this ID with sufficient time tomeet T+1 reporting?

This field represents the entity responsible and legally liable
for reporting. If you are a Reporting Submitting Entity, haveyou considered the scenarios in which the entity responsible
for reporting field is to be populated?
The entity responsible for reporting field must be populatedwith details of the trust bank. If you are a reporting
submitting entity, do you have sufficient details of the trustbank to facilitate this?
As outlined in the final report, there are certain transactions(i.e., equity swaps, FX swaps and FX forwards) where thecounterparties should determine the payer and the receiverof each leg as determined at the time of the transaction.
Would this information be stored for reporting trades thatare open pre-JFSA Rule Rewrite?

SUB TASKKEY CONSIDERATIONS●NOTIONAL AMOUNT SCHEDULE FIELDS (MULTIPLE)●PACKAGE FIELDS (MULTIPLE)

Under JFSA Rule Rewrite, firms must report the notionalamount schedules up front. Have you considered theimplications for how to construct a repeatable notionalschedule?
Under JFSA Rule Rewrite, reporting of package spread isoptional. Should your firm decide to report the fields, there
may be challenges if package deals are booked as two
separate trades. Have you considered how to link theseseparate trades for reporting?

REPORTING SIGNIFICANT ISSUES TO REGULATORY AUTHORITIESSUB TASK

KEY CONSIDERATIONS●IDENTIFYING SIGNIFICANT ISSUES●RESOLVING SIGNIFICANT ISSUES●Generally, when reporting parties experience significant
issues, these must be reported to the relevant supervisory
authority. Significant issues are defined as reporting
obstacles that prevent reporting, misreporting by a reporting
system flaw or an issue that causes a large number ofrejected reports. Is your Control Framework sufficiently
strong to ensure fast identification of “Significant Issues”?
Underpinning this requirement for reporting parties to notify
the regulatory authorities of Significant Issues is theenhanced focus on data quality. This means that whilst
reporting parties must have the ability to identify issues, theyshould also have the ability to remediate them in a timely
manner.
If you use a vendor for your reporting, do you have theappropriate SLAs in place for incident identification andremediation?

MISCELLANEOUS
SUB TASK

KEY CONSIDERATIONS●INTERNAL TRADE ID●5The internal trade ID or transaction ID field is a proprietary
field and will no longer be available when JFSA Rule Rewrite
goes live (due to XML schema restrictions). Have you
determined how this field is used by your firm?
Have you considered any alternatives noting there are nofree format fields within ISO 20022 XML?

THE CHALLENGES THESE
CHANGES CREATE
Aside from JFSA’s trade reporting rewrite, the upcoming changes to global derivatives tradereporting rules will create fresh challenges for market participants in terms of aligning with newand differing regulatory reporting requirements. Challenges include:

CONSTANT REGULATORY CHANGE

COST PRESSURERESOURCE SKILLSET CHALLENGES

Inconsistent adoption of new datarequirements – including UTI, UPI, andISO 20022 messaging – by regulators will
require firms to continually reassess andupdate their trade reporting technology
processes as the changes roll out.
Compliance is and will remain a moving
target, with failure potentially leading topenalties and reputational damage.

Operating and maintaining internal tradereporting systems is expensive. The costof continuously updating infrastructure toaccommodate differing reporting timelines
and requirements will be even greater,
especially if approached in a tactical versus
strategic manner.

Sourcing regulatory reporting expertiseto meet multiple different jurisdictional
reporting requirements is challengingfor firms.

DTCC IS HERE TO HELP EVERY STEP OF THE WAY
The changes in JFSA trade reporting rewrite are significant and impacted firms should begin planning as soon as possible. To
assist with your preparation, documentation and client enablement materials will be provided on DTCC Learning Center andour User Acceptance Testing (UAT) environment will be available for testing well ahead of the go-live date.
DTCC also runs regular working group meetings covering trade reporting requirements for jurisdictions across Asia Pacific –to ensure client readiness.

FOR MORE INFORMATION
Please visit dtcc.com/repository-and-derivatives-services

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