Reporting reforms took effect in February but the industry is way-off compliance
As pressures for timely reporting of over-the-counter
transactions mount on both sides of the pond, Ian
Salmon of ITRS Group, explores the challenges that
this presents, while explaining why the sell-side requires a
fresh approach to avoid heavy fines and reputational
Hindsight is a wonderful thing. Having met the Dodd-Frank
deadline for reporting trades to a data repository, most banks
in Europe initially felt the February 12 deadline for Emir
(European Market Infrastructure Regulation) compliance
presented little problem. Fast forward a few months and that
first flush of optimism feels wildly misplaced. Mention Emir to
a compliance officer now and you are likely to be met with
black scowls and a rapid change of subject. Somewhere along the
line, Emir turned out to be a lot more challenging than was
The differences between Emir and Dodd-Frank were always
going to create difficulties. Crucially, the two regulations
differ when it comes to which entity reports a trade. Unlike
Dodd-Frank, to achieve compliance with Emir, each counterparty
needs to apply a unique trader reference identifier to each
trade at the same stage of the workflow. How to ensure all
identifiers match so that both counterparties have the same
reference at a point at the same time is – often quite
literally – the six million dollar question.
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