Regulation: Transaction Reporting and Unique Trade Identifiers (UTIs).
In this article, we do the maths to argue to shift focus away from making the identifier ‘unique’ and suggest market participants revisit the issue of pairing and sharing UTIs in OTC markets.
Dual sided reporting has the potential to provide regulators with very accurate and timely aggregated and specific market exposures. The Unique Transaction Identifier (‘UTI’) is the link between the same trade reported separately by each party, and enables data to be properly analysed by regulators, by preventing double counting and identifying reporting errors.
In the absence of accurate UTI matching, reported data will become misleading or confusing; and industry consensus is that matching rates remain extremely low.
The pool of UTIs is ginormous! The odds of accidentally creating a duplicate of a truly randomly assigned UTI – or a collision – are incredibly low. Consider there are 183 x 10^80) combinations in a 52 character alphanumeric field. That’s 183 with 80 zeros.
Perspective on this number is difficult, but let’s try:
- In order to use the entire set of UTIs available, in the time since the earth was formed until now, we would need to issue 127 billion,billion,billion,billion,billion,billion,billion every second.