The European Securities and Markets Authority (ESMA) has published today an update of existing technical standards regarding data reporting requirements under the European Markets Infrastructure Regulation (EMIR). EMIR requires counter-parties to report their derivative trades to trade repositories following a defined data format.
Since the implementation of EMIR reporting, ESMA has issued several Q&As, clarifying some interpretations of data fields of the technical standards and the most appropriate way of populating them. In order to ensure a consistent and harmonised population of data fields and reporting of complex derivatives, ESMA decided to transpose its existing Q&As together with some other improvements into the technical standards by reviewing the existing EMIR TS which entered into force in 2013. The updated TS:
• Clarify data fields, including their description, format or both;
• Adapt existing fields to the reporting logic prescribed in existing Q&As or to reflect specific ways of populating them;
• Introduce new fields and values to reflect market practice or other necessary regulatory requirements.
EMIR requires ESMA to develop draft regulatory (RTS) and implementing technical standards (ITS) in relation to the application of the reporting obligation for counter-parties and CCPs.
Overall, EMIR aims at reducing systemic risk by, among others, introducing greater transparency to the OTC derivatives markets. Reporting of OTC derivatives contracts to trade repositories is part of the G20 commitments aimed at reducing risk in the financial system.
Next steps: ESMA’s final draft TS have been sent for endorsement to the European Commission. The Commission now has three months to approve these. Once endorsed, both the European Parliament and the Council have an objection period.