1. What is OTC Reference Data?
OTC Reference Data comprises reference and master data related to OTC financial instruments, such as swaps, options, forwards, and other customized OTC products. It includes data points like instrument identifiers, instrument characteristics, legal entity identifiers (LEIs) of counterparties, market data, pricing information, settlement details, and other relevant reference data fields.

2. Why is OTC Reference Data important?
OTC Reference Data plays a critical role in ensuring accuracy, consistency, and standardization of data used in OTC instrument trading, risk management, and regulatory compliance. It provides a common framework for identifying, categorizing, and describing OTC instruments and counterparties, facilitating efficient trade processing, risk analysis, and reporting.

3. What data points are included in OTC Reference Data?
OTC Reference Data encompasses a wide range of data points, including instrument identifiers (such as ISIN, CUSIP, or proprietary identifiers), instrument characteristics (such as underlying assets, contract terms, and settlement conventions), counterparties' LEIs, pricing information (such as market prices or curves), valuation methodologies, and other relevant data attributes specific to OTC instruments.

4. How is OTC Reference Data collected?
OTC Reference Data is collected from various sources, including financial institutions, trading platforms, industry associations, data vendors, and regulatory entities. Market participants maintain internal reference data repositories, while data vendors and industry utilities provide centralized reference data services that consolidate and distribute OTC Reference Data to market participants.

5. How is OTC Reference Data used?
OTC Reference Data is used across different functions and activities, including trade execution, trade confirmation, settlement, risk management, collateral management, and regulatory reporting. It ensures accurate identification and classification of OTC instruments, facilitates trade matching and reconciliation, enables valuation and risk calculations, and supports compliance with regulatory requirements.

6. What are the benefits of using OTC Reference Data?
Using OTC Reference Data offers several benefits, including improved data accuracy, increased operational efficiency, enhanced risk management, and streamlined regulatory reporting. It helps market participants standardize and automate their OTC instrument processing workflows, reducing operational errors, improving straight-through processing (STP), and enabling faster and more accurate trade settlements.

7. How is OTC Reference Data maintained and updated?
OTC Reference Data is continuously maintained and updated by market participants and data providers to reflect changes in instrument characteristics, pricing, and regulatory requirements. Data management practices, such as data validation, cleansing, and enrichment, are employed to ensure data quality and integrity. Regulatory initiatives, such as Legal Entity Identifiers (LEIs) and Unique Product Identifiers (UPIs), aim to improve the standardization and accessibility of OTC Reference Data.