EMIR Refit D-Day is days away - April 29 2024 (in the EU - with the UK to follow on 30 September) and from this date, exchange-traded and OTC derivativestraded in the EU are subject to new and expanded regulatory reporting requirements.

Specifically, EMIR Refit introduces 89 new reporting fields, a significant increase on the current 129 reportable fields to 203 (204 in UK) and including a new field - Derivative Based on Crypto-Assets - for reporting securities based on an underlying crypto-asset. To add to the Refit challenge, while there are 89 new fields, 15 existing fields are no longer required and there are a raft of updates to the name, definition and format with respect to how to report all fields.

As such, the term ‘refit’ somewhat understates and downplays the scale of change required to comply with EMIR reporting after 29 April, particularly when you add into this mix the requirement to report in the ISO 200022 XML standardised format (per SFTR and MiFIR), and the additional requirement to notify national competent authorities of any failures that arise during the reporting process.

History shows us that even given a long lead time to put in place required and appropriate changes to systems and processes that there will likely be challenges for many market participants in meeting new EMIR reporting rules completely from Day 1. In the aftermath of the original EMIR implementation in 2014, ISDA and other industry bodies reported many and varied ongoing compliance challenges for market participants with respect to obtaining and reporting UPIs, UTIs, LEIs and other product and counterparty identification data - all reference data - efficiently.

Issues following SFTR reporting standardisation to ISO 200022 suggests that 18 months lead time was insufficient to achieve a smooth transition to XML reporting formats. There are likely to be similar industry challenges post Refit D-Day.

Not only is there a requirement to report additional information, EMIR Refit also places enormous emphasis on enhancing and harmonising the quality of the data itself to support end to end validation and data reconciliation obligations, and to mitigate the risk of misreporting - and having to report associated reporting failures.

There is, thankfully, a bedding-in period following the 29 April EU EMIR Refit go-live date: While all outstanding derivatives at the time of go-live must be reported based on the new technical (XML) standards, there is a 6-month transition period (29 April to 26 October) in which to prepare and perform the first Refit-compliant ‘full load’. (Note: Changes in outstanding derivatives after go-live must be reported to the new standard). During this transition period, however, Trade Repositories will reject non-ISO 200022 files within 60 minutes of the receipt of the data - with rejection feedback and specific error codes and messages (in the new XML format).

It is also important to note that in the five month interregnum between EU and UK EMIR Refit regulatory deadlines, reporting entities that report currently in both jurisdictions will have to report UK EMIR under the ‘old rules’ and EU EMIR under the new ones. (What could possibly go wrong?)

With the 29 April implementation date almost upon us, EMIR reporting-eligible entities will (hopefully!) already have undertaken an enormous amount of work to upgrade and re-calibrate systems, processes and workflows to accommodate new reporting requirements. As part of this ‘fit for purpose’ regulatory reporting review, firms will have had to consider both the operational impacts and challenges, and the ‘compliance’ of the source data itself used to report transactions.

As we have explained in previous blogs, data ‘harmonisation’ and compliance is an enormous challenge for all market participants, precisely because it is not subject to prescribed standards. Different trading venues and data platforms may describe the same things in different ways, creating an enormous headache for those in data management, compliance and reporting functions that need to be able to validate and harmonise data from different sources and ‘fit’ it into different end destination workflows.

As the leading provider of futures and options reference data, we bring years of specialist data knowledge and an absolute focus on data quality excellence to deliver ‘quality assured’ and compliant ETD and OTC reference data to financial markets participants, regardless of source. We have the services and skills to translate and transform F&O reference data to fulfil EMIR Refit and other regulatory reporting obligations, so that you don’t have to.

With EU EMIR Refit upon us, and UK following soon, find out how we can make sure your reference data is right first time – request sample data or find out more