By: Mastan Momin
The European Commission has published revised regulatory technical standards (RTS) and implementing technical standards (ITS) on reporting under Article 9 of EMIR. In addition, the European Securities and Markets Authority (ESMA) has clarified the fields and the descriptions in the revised RTS.
The changes include:
- A Unique Trade Identifier (UTI) must be agreed to by both counterparties until a global UTI is available
- The product must be classified with an endorsed Unique Product Identifier (UPI) or a Classification of Financial Instruments (CFI) code
- The product must be identified through ISIN or AII
- The index must be identified using ISIN; each basket component that’s traded on a trading venue must be identified with an ISIN
- Segregated information of margin must be reported; initial margin posted, initial margin received, variation margin posted, variation margin received, excess collateral posted, and excess collateral received must be reported daily
- For trades centrally cleared, central counterparties valuation must be reported; for trades not cleared by a CCP, the methodology defined in the International Financial Reporting Standard 13 “fair value measurement” must be used for reporting the value of the contract daily
In addition, the new regulatory expectation is that all trades must be matched. Trade repositories must perform reconciliation internally and with other trade repositories to ensure that the trades reported by both parties are accurate and avoid further duplication of the transactions.
Due to the changes, we are likely to see banks move away from providing buy-side clients with delegated reporting services for over-the-counter (OTC) derivatives and exchange-traded derivatives (ETDs) as required under EMIR.
Investment managers need automated regulatory reporting to efficiently and cost effectively achieve regulatory compliance. SS&C can help you navigate the ever-changing regulations. Our cohesive approach simplifies the introduction of regulations and ensures managers are aware of all new developments. We provide a hub for multiple regulatory solutions. In addition, SS&C offers business and technical resources so you can comply with current and upcoming regulations easily and efficiently.
To learn more, read our whitepaper: Keeping up with European Market Infrastructure Regulations, or contact Mastan Momin at +44 20 3310 3255.