EU regulator published the draft technical standards for EMIR REFIT regulation
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Recently, the European Securities and Markets Authority (ESMA) completed and published the final report on guidelines for reporting under EMIR (European Market Infrastructure Regulation). The new report concerns guidelines, as well as technical standards for reporting, and the regulator noted that the rules will go into effect on April 29th, 2024.
According to ESMA, the guidelines will enhance the standardization and harmonization of reporting under EMIR. As such, they will contribute to the high-quality data, which is necessary in order to have effective monitoring of systemic risk.
Details of the final report
The regulator believes that one of the direct consequences of boosted standardization and harmonization will be the ability to contain costs. Apart from that, the new rules will allow for the complete reporting chain, including the counterparties that report the data, as well as TRs, which are in charge of putting in place procedures that verify if the data is complete and correct. Then, there are authorities that use this data for regulatory and supervisory purposes and alike.
ESMA further added that the guidelines now explain how to transit into the new set of rules, as well as what is the number of reportable derivatives, what derivatives are exempt from reporting/delegation of reporting, and even how the allocation of reporting responsibility works.
Other than that, the guidelines offer insight into the entire reporting logic, as well as the reporting fields’ population, ensuring the data quality and reporting of different types of derivatives. The regulator concluded by noting that the guidelines provide insight into the Trade State Report’s structure, as well as a reconciliation of derivatives by trade repositories.
The final report arrived only three days following the publication of the draft technical standards by the EU’s securities market regulator. The regulator stated that the report also takes into account things like the feedback that was received after it published a consultation paper in July 2021. In other words, the regulator kept in mind the insight provided by everyone who offered feedback on the proposals made in the paper. The next step is to translate the guidelines into all EU languages.
EMIR vs. EMIR REFIT
EMIR (European Market Infrastructure Regulation) is there to stipulate the requirements for clearing and bilateral risk management. It does this for OTC derivatives, and it reports requirements for OTC and exchange-traded derivatives. The regulation also precisely outlines requirements for the performance of different activities of trade repositories and central clearing counterparties.
This regulation has been around for over a decade after emerging in August 2012. It was made in response to the G20 Pittsburgh Summit of 2009, and its goal was to increase transparency and reduce risks in the derivatives market.
On the other hand, EMIR REFIT is a regulation that amended certain sections of the EMIR. It has been around for three and a half years after emerging in June 2019. Following that, EMIR 2.2 emerged as well in January 2020, amending sections of the EMIR that involve procedures and authorities tied to the authorization of CCPs.
