EMIR Reporting (2024)

As a seasoned expert in financial regulations, particularly in the domain of derivatives reporting under EMIR (European Market Infrastructure Regulation), I bring forth a wealth of knowledge and hands-on experience in navigating the intricate landscape of trade repositories, regulatory technical standards, and the nuances of reporting obligations.

The cornerstone of EMIR reporting mandates the submission of all derivative contracts to Trade Repositories (TRs). These TRs play a pivotal role in centralizing and maintaining records of derivative contracts, contributing significantly to transparency in derivative markets and mitigating risks to financial stability. EMIR, established to regulate over-the-counter (OTC) derivatives, sets forth comprehensive rules and guidelines for reporting, registering, and accessing data.

ESMA (European Securities and Markets Authority) has been instrumental in developing detailed regulatory technical standards and implementing technical standards, regularly revising them to stay abreast of market developments. Notably, the regulatory technical standards applicable from 1 November 2017, revised implementing technical standards, and subsequent updates play a crucial role in shaping the reporting landscape.

One key element in EMIR reporting is the use of Legal Entity Identifier (LEI) codes to identify counterparties that are legal entities. These LEIs can be issued by any of the Local Operating Units (LOU) within the global entity identifier system (GLEIS). It is imperative that counterparties adhere to validation rules imposed by TRs to ensure compliance with the EMIR regime and the specifications outlined in the Technical Standards.

With the advent of EMIR REFIT (Regulatory Fitness and Performance Program), effective from 29 April 2024, counterparties and reporting entities must also consider guidelines on reporting, validation rules, reconciliation tolerances, and ISO 20022 XML schemas. The reporting process involves meticulous attention to details such as incoming and outgoing messages, query messages, rejections, and mapping tables, all of which are updated and applicable from 29 April 2024.

Data quality is paramount in the functioning of the reporting regime under EMIR. TRs play a vital role in validating data submissions, reconciling data between parties, and ensuring robust response mechanisms. Regulatory technical standards on the reconciliation and verification of data, along with guidelines on data transfer between trade repositories under EMIR and SFTR, reinforce the importance of maintaining data integrity.

Accessing data is another critical aspect addressed by EMIR regulations. Direct and immediate access to derivatives data is essential for authorities to fulfill their responsibilities, and establishing appropriate access levels ensures the confidentiality of trade repository data. Regulatory technical standards on publicly available data, data available to authorities, and subsequent revisions underscore the significance of controlled access mechanisms.

In conclusion, the EMIR framework is a comprehensive regulatory structure designed to enhance the integrity and transparency of derivative markets. Stakeholders must stay abreast of evolving standards, guidelines, and reporting requirements to ensure compliance and contribute to the overall stability of the financial ecosystem. For further details and clarifications, stakeholders are encouraged to refer to ESMA's Q&A on EMIR implementation and other relevant resources provided by regulatory bodies.