The European Securities and Markets Authority (ESMA) has published the final technical standards (RTS and ITS) under the European Markets Infrastructure Regulation (EMIR) Refit.
The report covers data reporting to trade repositories (TRs), procedures to reconcile and validate the data, access by the relevant authorities to data and registration of the TRs.
The purpose of Refit is to address disproportionate compliance costs, transparency issues and insufficient access to clearing for certain counterparties. Its aim is to simplify the rules and reduce regulatory and administrative burdens where possible, especially for non-financial counterparts (NFCs), without compromising the regulatory goal of EMIR.
This final report and draft RTS and ITS largely reflect the original proposals included in the consultation paper and focuses on further harmonisation of the reporting requirements as well as enhancements in the counterparties’ and TRs’ procedures on ensuring data quality.
The key proposals included the alignment with international standards, end-to-end reporting in ISO 20022 XML; harmonised data quality requirements across TRs; simplified rules for extension of registration from Securities Financing Transactions Regulation to EMIR; standardised process for data access.
As part of ESMA’s efforts to bring all parts of the market up from ISO 15022 to ISO 20022, EMIR Refit would bring EMIR in line with the Securities Financing Transactions Regulation (SFTR).
ESMA has also clarified the relevant documentation to be provided by TRs willing to extend their registration from SFTR to EMIR.
The draft technical standards have been submitted to the European Commission, and the proposed timeline for implementation of the technical standards by the reporting counterparties and TRs in the union is 18 months from the date of their publication in the Official Journal.
ESMA said it will continue working on the guidelines on reporting under EMIR Refit as well as on the technical documentation, including XML schemas and validation rules.
The authority aims to provide the industry with the relevant guidance and documentation sufficiently ahead of the reporting start date to ensure a smooth transition to the reporting under the revised rules.
Outgoing ESMA chair Steven Maijoor commented: “The final report is an important milestone towards ensuring the full alignment of EU derivatives reporting with globally agreed recommendations, and in establishing the highest standards for data quality worldwide."
“A globally harmonised approach to derivatives reporting ensures that regulators have the information they need to support their supervisory and financial stability objectives."
Maijoor described the harmonisation of data elements as essential for authorities through the use of the unique transaction identifier, the unique product identifier.
