EMIR Refit reporting rules will go into effect in less than 10 months, introducing many new fields and concepts to the EU and UK reporting regimes. And while ESMA has published reporting guidelines, a number of issues remain outstanding, given the increased amount of data reporting required.
Related: Navigating the seas of regulatory change
I recently joined representatives from ISDA and ESMA to discuss how firms can best prepare for these upcoming technical standards that will impact both financial and non-financial counterparties entering into derivatives contracts.
A summary of our discussion is below:
监管 Objectives
The EMIR refit aims to enhance the information available to regulators and increase the usability of data. There are many pieces to contribute to the goal of improving data from a regulatory perspective:
- Full standardization of data - through Global UPI, UTI和ISO 20022, which are expected to increase data transformation
- Global harmonization - the use of global standards will further enable data aggregation among regulators.
- Lifestyle events model - will add sophisticated logic around the event date.
- Data quality requirements from trade repositories - helpful for counterparties which should use feedback and flag any substantial data quality issues identified
Industry Preparations
存 and other trade repositories have been conducting roundtables with ESMA, as well as discussing with the FCA their final policy statement, commonalities with EMIR and deliberate divergences. 除了, industry preparations include bilateral working groups to ensure a seamless end-to-end flow of data:
- ISDA工作组 – working through challenges
- ISO工作组 – understanding derivative trade report schema
- Industry working groups – discussing expected changes, 从连接性, 提交, 模式的更改, 解除, 对报告的影响, changes to trade state reports, and knock-on impacts to reconciliations
- 贸易存储库 – discussing how to best exchange data in a timely fashion
客户面临的挑战
据本尼雅说, clients have raised the following challenges in implementing the technical standards of the EMIR Refit:
- XML generation, particularly for small- to medium-sized firms
- Increase in the number of new fields, including counterparty data
- Introduction and operational processes surrounding the UPI and the UTI
- Changes to Trade State management
- Increased number and types of reconciliation fields
- Calculation and execution of significant issue notifications
- Extra day lag for Trade State report
The new EMIR Refit rules will improve harmonization and data quality and provide firms with a reason to review their regulatory reporting operating model and include automation. 存 will continue to engage with industry partners as well as host working groups and webinars to best help clients prepare.