What Are the Regulatory Requirements for Data Integrity in Derivatives Clearing, and How Does Hashing Help Meet Them?

Regulators in the derivatives market, such as the CFTC in the US and ESMA in Europe, have strict requirements for data integrity to ensure market stability and protect investors. These regulations mandate that all trade data be accurately recorded, maintained, and reported.

Hashing is a powerful tool for meeting these requirements as it provides a cryptographic guarantee of data integrity. By hashing trade data, clearinghouses and other market participants can prove that the data has not been altered or tampered with.

This creates a verifiable audit trail that can be used to satisfy regulatory reporting requirements and resolve disputes.