Position vs Transaction Reporting – After EMIR Refit you need to be in sync with your counterparty
Under EMIR Refit, counterparties are to do transaction level reporting and will only be permitted to report at position level where both counterparties agree to do so.
The EMIR Regulation requires reporting of all details of a derivative contract as well as any modification or termination of the contract. We have discussed the differences in reporting at position, trade and lifecycle levels, in our previous article here.
Under EMIR, reporting at position level is only permissible for the below 3 types of derivatives:
- Contracts for Difference (CFDs),
- Exchange traded derivatives (ETDs) and
- centrally-cleared OTC derivatives.
Note that both the EU and UK regimes take the same approach on position level reporting where their slight nuances and criteria required are discussed in detail in our article here.
EU – ESMA:
ESMA provides that counterparties should report, if applicable, the relevant event type, in the RTS on reporting.
We set out table below from the Guidelines which show the allowable combinations of action types and event types and whether they apply at trade level, position level or both.
UK – FCA:
The FCA sets out their expectations on the allowable combinations of action types and event types in the UK EMIR Validation Rules (in the ‘Trade validations auth.030’ sheet). The spreadsheet shows whether each field is mandatory, conditional, optional or not relevant for given action types under both transaction reporting and position reporting.
For those counterparties subject to EMIR, in addition to discussing and agreeing with your counterparties whether you will be reporting at a transaction level or position level, you will also need to assess the responsibilities for transaction reporting and this will involve monitoring your counterparties’ status including consideration of clearing thresholds.
Regulatory References
The requirement to agree between counterparties in order to undertake position reporting can be found:
- EU EMIR: pursuant to Article 9(1e)
- UK EMIR: Article 5 of EMIR Technical Standards on the Minimum Details of the Data to be Reported to Trade Repositories 2023 (for UK).
If you require assistance in determining whether you should do transaction level or position level reporting or anything else in relation to how to comply with your obligations under EMIR Refit, please let us know.
