Under the European Market Infrastructure Regulation (EMIR), all counterparties are required to report details of any derivative contract they have concluded, or which the counterparty has modified or terminated. Due to Brexit, the EU regulations have been onshored as UK EMIR under the European Union (Withdrawal) Act 2018. On this page, EMIR refers to both EU and UK EMIR unless otherwise specified.
EMIR reporting requirements involve:
- reporting all derivative contracts – both over-the-counter (OTC) and exchange-traded;
- clearing eligible OTC derivatives;
- measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives;
- common rules for central counterparties (CCPs) and for Trade Repositories (TRs); and
- rules on the establishment of interoperability between CCPs.
Who has an EMIR reporting obligation?
EMIR requires all counterparties and CCPs to report details of any derivative contract (with the underlying asset classes – interest rate, FX, credit, equities and commodities) they have concluded and of any modification or termination to TRs.
EMIR recognises 2 types of counterparties to a derivative contract:
- Financial Counterparties (FC) – investment firms, fund managers, banks, insurers etc.; and
- Non-Financial Counterparties (NFC) – entities not qualified as a financial counterparty, including those not involved in financial services.
Each counterparty must report their leg of a trade unless:
- one counterparty agrees to report on behalf of another counterparty by prior agreement;
- a counterparty to a trade has delegated the reporting obligation to a third-party; or
- a trade is executed between a FC and a NFC- where the FC will be responsible and legally liable for reporting on behalf of itself and the NFC-.
Where one counterparty reports on behalf of another counterparty, or a third-party reports a trade on behalf of one or both counterparties, the report details will include the full set of details as required by each counterparty.
What to report and to whom?
Financial Counterparties (FC) and Non-Financial Counterparties (NFC) trading in derivatives must report details of all derivatives trades via a TR. This includes all the details of trades and any event thereafter that affects the valuation or the terms of the trade. It also includes identification of the country of the counterparty (country of incorporation for legal entities, country of residence for natural persons).
Any derivative contract is required to be reported under EMIR reporting requirements, and includes:
- financial derivatives settled physically or in cash;
- commodity derivatives that must or may be cash settled;
- physically settled commodity derivatives that are traded on a regulated market; and
- physically settled commodity derivatives that have characteristics of other derivative financial instruments.
When do reports have to be made?
Reports are required to be submitted to a registered TR no later than one working day after the trade has been made (T+1).
How can we help you?
TRAction can provide you with delegated reporting solutions in accordance with the reporting requirements outlined above. We help you understand your EMIR trade reporting obligations and completely simplify your reporting process. Depending on how our client’s system works, TRAction has 3 different reporting methods ready to be tailored to our clients’ needs.
Wondering how much we charge? View our pricing schedules.