Revised EMIR RTS and ITS published in OJ
According to article 85 of EMIR ESMA is obliged to prepare and submit a general report with appropriate proposals that ensure a better implementation of the Regulation. The current revised RTS and ITS are focused mainly on the better quality of the data received by the trade repositories and ESMA.
On 13 Nov 2015 a final report – review of the regulatory and implementing technical standards on reporting under article 9 of EMIR has been issued by ESMA.
The most important parts of the EMIR Q&As documents have been included in the revised EMIR regulatory technical standards (RTS) and implementing technical standards (ITS). This has been done because EMIR Q&As document is not legally binding and it serves to promote common supervisory approaches and practices in the application of EMIR. It is aimed at competent authorities to ensure that in their supervisory activities their actions are converging along the lines of the responses adopted by ESMA. Information regarding the penalties for inaccurate EMIR reporting is available here.
On 21 January 2017 the revised RTS and ITS have been published in the Official Journal. They enter into force on 10 February 2017 and shall apply from 1 November 2017.
Commission Delegated Regulation (EU) 2017/104 introduces the following amendments to the EMIR RTS:
- New rules on the reporting of a contract composed of a combination of several other derivative contracts. In case the fields in the report do not allow reporting of a complex products by a single line, then the counterparties should decompose the contract and agree on the number of lines (with separate UTIs) that should be submitted. The transaction reports should be identified by using the new field ‘Complex Trade Component ID’ for any transaction reports resulting from the same derivative contract.
- New rules on the reporting of a previously reported contract which is subsequently cleared by a CCP. The existing contracts shall be reported as terminated and the new contracts resulting from the transaction shall be reported. For contracts concluded and cleared on the same date, only the cleared contract shall be reported.
- New rules for the reporting of collateral exchanged by the counterparties, including specifying what exactly should be reported, by whom, and how it should be valued.
- Rules for the reporting of the notional amount for different classes of derivatives. For swaps, futures and forwards (traded in monetary units) the notional amount should be the reference amount from which the contractual payments are determined in derivatives markets. For options the notional amount should be calculated using the strike price. Financial CFDs and commodities denominated in units (like barrels or tons) – the resulting amount of the quantity at the relevant price set in the contract.
- A new section of asset class specific fields for credit default swaps (CDS) with 10 fields and other new or renamed fields.
- More fields are included to correctly reflect the different types of collaterals: initial margin posted; variation margin posted; initial margin received; variation margin received; excess collateral posted; excess collateral received and the relevant fields that identify the currency of the new types of the margin fields.
- More new fields like: “Level” to indicate whether the reporting is done on a trade level or a position level, etc.
Commission Implementing Regulation (EU) 2017/105 covers the following amendments in EMIR ITS:
- Rules for clearly identifying the counterparty side depending on the different asset classes.
- Identification and classification of the derivatives. The ETDs will be identified by ISIN or AII. The OTC derivative contracts will be identified by their types. Two more categories are added: ‘SB’ for spread bet and ‘ST’ for swapton.
- Unique Trade Identifier (UTI). The UTIs of the cleared trades should be generated by the CCPs. For centrally-executed bit not centrally cleared trades the UTI shall be generated by the trading venue. For centrally confirmed and cleared trades the UTI generation obligation is placed to the clearing member. For trades that were centrally confirmed by electronic means but were not centrally cleared the UTI should be generated by the trade confirmation platform at the point of confirmation. Financial counterparties (FC) trading with non-financial counterparties – the FCs. For all other cases – the seller is responsible to generate the UTI and communicate it to the buyer. The UTIs should be generated and communicated in a timely manner so that the other counterparty can meet its reporting obligations.
- Clear rules about identifying the venue of execution.
- Extending the deadline for backloading from 12 February 2017 to 12 February 2019.
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