A just-in-time guide to EMIR trade reporting

Transcription

1 A just-in-time guide to EMIR trade reporting

2 Agenda I. Reporting Obligations A. Who must report B. What has to be reported C. When does reporting begin II. III. Regulatory Guidance Where you can report your transactions IV. Reporting options V. How to get started in your implementation plan

3 EMIR Trade Reporting Reporting Focus: all counterparties & all asset classes Provides regulators with a comprehensive view of EU risk exposure for derivatives Includes all types of counterparties Financial High volume Non financial Low volume Encompasses all derivatives asset classes: OTC & ETD Interest Rates Credit Equities FX Commodities Exempts only individuals (persons) and non EU entities

4 EMIR Trade Reporting Reporting Obligation: two-sided buy side & sell side Differs from U.S. Dodd Frank reporting where only one side is obligated to report Can be reported by the CCP if executed on an exchange and centrally cleared Must be reported by T+1 to be considered timely Requires all parties to the trade to be identified with compliant LEIs (legal entity identifiers); entities defined by legal standing in an insolvency Permits delegated reporting, but obligation remains with principals to the trade May trigger multiple reportable transactions depending on the structure of the trading relationships e.g. introducing and executing brokers

5 EMIR Trade Reporting Reportable Transactions: full life cycle Each trade confirmation is identified by a Unique Trade Identifier (UTI) Basic reporting structure comprised of over 80 data fields: Counterparty data 26 field Common data 59 fields Subsequent life cycle events are identified by original UTI: Novations Modifications Terminations Compression Collateral changes Collateral valuations may be reported with mark to market or mark to model.. can be done at the portfolio level Reporting requirements backdated from 16 August 2012

6 EMIR Timelines Postponed in 2013, but firm now Product class Dates Comments OTC Derivatives 12 February 2014 All asset classes, cleared and noncleared ETD Derivatives 12 February 2014 ESMA wanted to delay until 2015 but the EU refused Trades predating 16 August 2012 & still open Trades predating 16 August 2012, but no longer open Trades opened and closed since 16 August 2012 Within 90 days after reporting start date Within 3 years of reporting start date Within 3 years of reporting start date All All All

7 Regulatory requirements EMIR documentation Regulation EU No. 648/2012 dated 4 th July 2012 came into effect on 15 th March 2013 You are required by law to report all of your derivatives transactions to an ESMA recognized trade repository. All documentation is available on ESMA s website: http: // Key reports: Final report: ESMA 2012/600 dated 27 Sept 2012 pages and Technical specification of data: ITS 1247/2012, RTS 151/ 2012 EMIR Q & A: 2013/1959 from 20/12/ most recent guidance

8 Trade Repositories in EU ESMA approved six for 12 February Trade Repository Instruments Location CME All asset classes Member of CME Group DTCC (UK & Netherlands) All asset classes EU based entity part of DTCC s Global Trade Repository ICE Trade Vault Europe KDPW (National Depository for Securities) \ RegisTR Commodities, credit, interest rates, & FX Initially interest rates and credit instruments All asset classes Member of ICE Subsidiary of Polish CSD Member of DB group; cofounded by Clearstream & Iberclear UnaVista All asset classes Member of LSE Group

9 Reporting to Trade Repositories Direct reporting: Case 1: Both Counterparties report their Counterparty & Common Data to the TR Counterparty A Confirm Transaction Unique Trade identifier #100 Counterparty B Counterparty & Common Data for CP A Trade Repository 1 Trade Repository 2 Counterparty & Common Data for CP B TRs match data using UTI Both counterparties must ensure that common data are consistent across both reports for the same trade ESMA

10 Reporting to Trade Repositories Delegated reporting: Case 2: Counterparty A reports their Counterparty & Common Data to the TR; Counterparty B uses a Third Party to report on their behalf Counterparty A Confirm Transaction Unique Trade identifier #100 Counterparty B Counterparty & Common Data for CP A Trade Repository 1 3 rd Party on behalf of Counterparty B Counterparty B provides data to 3 rd Party Counterparty & Common Data for CP B TR pairs & matches data using UTI ESMA

11 Getting started Key Next Steps - internal 1. Confirm that you must report a) Identify type of entity: FC, NFC+ or NFC- 2. Organize a small Project Team this week a) Front Office b) Ops Middle Office c) Legal/Compliance d) Technology Key Next Steps - external 1. Obtain an LEI for all of your trading entities a) b) c) 2. Choose a Trade Repository a) Complete documentation b) Prepare to test c) Notify counterparties 3. Profile your trade reporting requirements a) Asset classes b) Volumes c) Counterparties d) Trading venues e) CCPs

12 TR Compare - A guide from Thomas Murray IDS

13 Follow-up Questions Janet Wynn Director, Business Development Thomas Murray IDS