FCA: EMIR reporting technical standards

New EU Rules on Derivatives Trading
The EMIR Reporting Technical
Victoria Cooley
OTC Derivatives & Post Trade Policy
Financial Conduct Authority
1. Introduction to EMIR
2. The reporting requirements
3. Frequently asked questions
4. Reporting to trade repositories
G20 statement in Pittsburgh:
All standardised OTC derivative contracts
should be traded on exchanges or
electronic trading platforms, where
appropriate, and cleared through central
counterparties by end-2012 at the latest.
OTC derivative contracts should be
reported to trade repositories. Noncentrally cleared contracts should be
subject to higher capital requirements.
The reporting requirements
Reporting obligation
Applies to all counterparties to all derivative contracts
(OTC and exchange traded)
Information to be reported to TRs - about 60 data fields
in total!
Basic trade information, ‘who, what, when, how many
and how much’;
the parties to the contract (or the beneficiary)
type of contract
notional value
settlement date
unique trade identification
amendments to trade
Reporting of exposures
Essential for monitoring systemic risk
Only financial and non-financial counterparties
(NFC) above the clearing threshold are
required to report exposures
Information to be reported daily;
- Mark to market or model valuations
- Collateral value and basis (transaction or portfolio)
• 6 month transitional from reporting start dates
for reporting exposures information
Timeline for reporting
Credit and interest rate derivatives;
- If no registered TRs by 1 April – 90 days
after registration
- Expected mid-September 2013
For all other derivatives;
- If TR is registered by 1 October - reporting
begins 1 January 2014
- If no registered TRs by 1 October – 90 days
after registration
Timeline for reporting
• Backloading of existing trades
If outstanding at time of reporting date;
- 90 days to report to TR
- report in current position
If not outstanding, but remained
outstanding on 16 August 2012;
- 3 years to report to TR
- report final position
Frequently asked questions
Frequently asked questions
• There is a need to ensure harmonisation of
reporting across EU
• ESMA published 1st set of Q&As in March 2013
• Expected to be an iterative process
• Need for immediate Q&As for trading scenarios,
give up trades, block/allocation trades
Frequently asked questions
Still some uncertainty around
Work is ongoing to establish how EMIR
applies in some situations
Rest of the presentation represents current
FCA views and may be subject to further
clarification by either the European
Commission or ESMA
Clearing models
If the process involves creation of a
bilateral trade followed by novation,
separate reports likely to be required
If clearing is instantaneous and no bilateral
trade exists, only the cleared trade should
need to be reported
Correct approach where novation occurs
very quickly after bilateral execution still
subject to discussion
Who has reporting obligation
Brokers and dealers do not have a
reporting obligation when they act purely
in an agency capacity
Still some uncertainty over how to report
transactions where a broker, dealer or
clearing member clears or facilitates a
transaction for a client on a principle basis
Give up trades
• Only counterparties to the contract
have reporting obligation
• Typically, counterparty and CCP would
• Approach still to be agreed at EU level
Reporting of block/allocation trades
• No exemptions – reporting obligation applies to
all derivative transactions
• If block trade gives rise to multiple
transactions, each of those would have to be
• Process still to be agreed at EU level however
we expect both stages to be reported
Reporting to trade repositories
How to fulfil reporting obligation
• Both counterparties MUST report each trade unless by
prior arrangement, one party can report on behalf of
both counterparties
• Either counterparty may also delegate reporting to a
third-party (such as a CCP or trading platform)
• Likely through contractual obligations with one another
which should set out what information is to be reported
• Regulatory responsibility remains with original
Practical preparations
Firms either have to establish delegated reporting
arrangements or direct connectivity with a TR
If delegating;
- make sure delegate is willing to accept the
delegation (including for any intragroup trades)
- have processes in place to ensure that
reports submitted on your behalf are accurate
If want to connect directly to a TR;
- start now
- consider whether TR(s) will be authorised in time
- will TR cover all asset classes for all reporting
• Legal entity identifiers (LEI)
- ROC established January
- Expect Central Operating Unit to be formed
in April/May
- Interim phase – Local Operating Units
- Expect pre-LEIs code to be mutually
• Unique product identifiers
- No agreed EU UPI
- Existing codes, ESMA taxonomy
• Unique trade identifiers
- No agreed EU UTI
- Counterparty generates and agrees with
other counterparty
- Lifecycle events include UTI linked to
original UTI
Further information – visit our website
• Links to Commission and ESMA
• Link to ESMA Q&A
• Link to FCA consultations
• EMIR mailing list
Any questions?

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