ESMA provides clarity on EMIR Refit 20 December 2022Europe Reporter: Carmella Haswell
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The European Securities and Markets Authority (ESMA) has clarified legal provisions on reporting and data management under the amended EMIR Refit rules.
Guidelines provided by the financial markets regulator aim to further enhance the harmonisation and standardisation of reporting under the upcoming European Market Infrastructure Regulation (EMIR) — which is set to go-live on 29 April 2024.
The enhancement of harmonisation and standardisation is expected to contribute to the high quality of data necessary for the effective monitoring of systemic risk, in addition to containing costs along the reporting chain.
The final report contains feedback received from stakeholders on key elements of ESMA’s consultation paper on EMIR Refit guidelines published in July 2021.
In its recent paper, ESMA clarifies aspects of the regulation concerning the transition to reporting according to the revised regulatory and implementing technical standards (RTS and ITS) on reporting.
ESMA explains how counterparties should update all of their outstanding derivatives at a trade and at a position level in the course of the transition period, and the relevant action types that should be used.
The regulatory adds that the transition period “does not impact in any way the obligation under Article 9 of EMIR to report the relevant events by T+1”, and that “all the reports submitted after the start of reporting under the revised technical standards will have to comply with the amended requirements”.
The final report also pinpoints one respondent who questioned what actions a trade repository (TR) should take for trades that are not updated at the end of the transition period.
In this respect, ESMA says it will be monitoring the situation during the transition period and may suggest any actions deemed necessary. However, the expectation is that all counterparties comply with the 180-day deadline.
The final report on guidelines provides further explanation on issues regarding the number of reportable derivatives, intragroup derivatives exemption from reporting, and ensuring data quality by the counterparties and the TRs, to name a few.
ESMA will continue to engage with the market participants with a view to clarifying any remaining doubts and to facilitate a smooth transition to reporting under EMIR Refit.
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