EMIR: Everything You Need to Know
This page provides an overview of the reporting rules outlined in EMIR, and the actions your firm will need to take in order to be compliant.
EMIR (The European Market Infrastructure Regulation) is a European regulation intended to increase the transparency of the derivatives market. It states that, when trading derivatives, both counterparties must file a report to an eligible Trade Repository (TR).
Who Has To Report Under EMIR?
All counterparties involved in the trading of derivatives must file transaction reports under EMIR.
What Transactions Must Be Reported Under EMIR?
Both Exchange Traded Derivatives (ETDs) and Over the Counter Derivatives (OTC Derivatives) must be reported under EMIR.
Despite the EMIR regulation itself being titled Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories, it is not only OTC derivatives which must be reported under EMIR: all counterparties are required to report details of any derivative contract – OTC or Exchange Traded – that has been concluded, modified or terminated.
Part III: Trade Repositories, TR Question 5 (pp. 82-83) of ESMA’s most recent Q&A on EMIR clearly states the following:
TR Question 5
Will the reporting obligation apply to all ETD (Exchange Traded Derivative) transactions concluded on the regulated market?
TR Answer 5
The EMIR reporting obligations covers all derivatives
Part V of this Q&A provides further information on the reporting of ETDs.
How Are OTC Derivatives and ETDs Defined?
Article 2 of EMIR defines an OTC derivative or OTC derivative contract as any ‘derivative contract the execution of which does not take place on a regulated market or on a third-country market considered as equivalent to a regulated market’.
It should be noted here that derivatives traded on Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs) are considered OTC derivatives under EMIR.
ESMA’s EMIR Q&A.
Part 1: OTC Derivatives, OTC Question 1 (pp. 15-16) of ESMA’s EMIR Q&A states:
OTC Question 1: Definition of OTC Derivatives
Should the following be considered OTC derivatives?
a) Derivative contracts traded on MTFs or OFTs
OTC Answer 1
a) Derivative contracts traded on MTFs or OTFs are OTC derivatives in the context of EMIR
Annex I of Directive 2014/65/EU on Markets in Financial Instruments and Amending Directive 2002/92/EC and Directive 2011/61/EU provides legal definitions of the various forms that derivatives can take.
To Whom are EMIR Reports Sent?
EMIR reports should be sent to a Trade Repository (TR) recognised and registered ESMA.
The following trade repositories are currently registered by ESMA for the purposes of EMIR reporting.
– DTCC Derivatives Repository Plc (DDRL) – GB – All asset classes
– Krajowy Depozyt Papierów Wartosciowych S.A. (KDPW) – Poland – All asset classes
– Regis-TR – Luxembourg – All asset classes
– UNAVISTA LIMITED – GB – All asset classes
– CME Trade Repository Ltd. (CME TR) – GB – All asset classes
– ICE Trade Vault Europe Ltd. (ICE TVEL) – GB – Commodities, credit, equities, interest rates
– UnaVista TRADEcho B.V. – The Netherlands – All asset classes
Trade Repository Definition
A trade repository is an entity that functions as a central data centre which collects and maintains reports and records relating to the exchange of derivative contracts.
What Needs to be Included in an EMIR Report?
There are a wide range of data fields which must be included in EMIR reports. These included:
– Regulatory Technical Standards
– Implementing Technical Standards
– Revised Regulatory Technical Standards (applicable from 1 November 2017)
– Revised Implementing Technical Standards (applicable from 1 November 2017)
– Revised Implementing Technical Standards (applicable from 11 April 2019)
Legal Entity Identifier codes (LEIs) should be used to identify any relevant counterparties in EMIR reports.
If you are unsure about the data you need to include in your EMIR reports, feel free to fill out a contact form on our website and one of our data analysis team will assist you.
How to File an EMIR Report
While EMIR reports can be sent directly to a Trade Repository, most firms opt to use a technical router.
eflow currently functions as a technical router for the purposes of EMIR reporting. Our job as a technical router is to serve as an intermediary between the reporting firm on the one hand, and Trade Repositories, Approved Reporting Mechanisms (ARMs) and National Competent Authorities (NCAs) on the other.
Making use of a technical router removes a lot of the risk from EMIR reporting. They will ensure that your data is properly formatted before sending it to the relevant TRs and ARMs, and will receive any response files generated if the report you have submitted contains errors or exceptions. The exceptions can then be dealt with in eflow’s transaction reporting software.
eflow’s EMIR Reporting Solution
Making use of an approved technical router like eflow can massively simplify and speed up your firm’s EMIR reporting process. Our transaction reporting software TZTR covers all EMIR reporting obligations, and if you sign up, our data analysis team will help you make sure your reports are timely and accurate.
If you want more info on our EMIR reporting solution, feel free to fill out a contact form, book a demonstration, or send an email to firstname.lastname@example.org.
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