EMIR Reporting Obligation

The objective of this obligation is to improve transparency of the (OTC) derivatives market. The information that needs to be reported includes information about the counterparty (“counterparty data”) and information about the derivative contracts (“common data”).

Currently FCs, NFCs and entities partially exempted from EMIR are subject to the reporting obligation, irrespective of who is on the other side of the trade.

Non-EEA market participants are not subject to the reporting obligation. However, as the EEA counterparties need to comply with the reporting obligation, EEA entities are obliged to disclose information regarding non-EEA counterparties when transacting with them.

EMIR REFIT
In December 2022, the European Commission proposed updates to EMIR with EMIR REFIT, as part of a broader package of measures related to the Capital Markets Union (CMU). As a result, several changes will occur in 2024, particularly in the transaction reporting rules.

In the EU:

From 29 April 2024, new reporting rules will apply to counterparties for all new and outstanding derivative transactions. Transactions already outstanding on 29 April 2024 need to be updated in line with the new reporting rules before 26 October 2024.

In the UK:

From 30 September 2024, new reporting rules will apply to counterparties for all new and existing derivative transactions. By March 31, 2025, transactions already outstanding on 30 September 2024 need to be updated in line with the new reporting rules.

The main changes in the reporting rules for the EU and the UK are:

1. Content and format of reports: The number of fields to report will increase from 129 to 203 in the EU and to 204 in the UK. Reports must be submitted using a common XML template based on ISO 20022 standards.
2. Reconciliation and sharing information about data quality issues: parties involved in (delegated) reporting must have arrangements to account for feedback received from Trade Repositories about reconciliation differences of the information reported (on their behalf).
3. Notification of significant or material reporting issues: Reporting entities in the EU and the UK must promptly inform regulators of certain reporting issues. Entities that delegate reporting to a third party and remain responsible for reporting must provide the necessary information to the third party to comply with the notification obligation.
4. Other requirements: Counterparties need to ensure that they regularly renew their LEI and maintain a valid LEI throughout the duration of the transaction in derivatives. Where a LEI is expected to change (e.g. due to a corporate restructuring event) this should be communicated as soon as possible, as the Trades Repositories need to timely process such change. Counterparties that have delegated reporting to another counterparty, are responsible for timely providing any information that is required to report on their behalf.

Conditions for reporting at the position level

Under the new EU and UK reporting rules, counterparties that – where possible – want to report at the position level (instead of reporting each individual transaction) must first agree to do so.

Delegated reporting by Rabobank

Rabobank needs to timely receive at least the following information in order to report on behalf of a counterparty:

(i) the LEI of that counterparty.

(ii) the LEI of a broker used;

(iii) the LEI of a Clearing Member used;

(iv) information on whether the transactions are directly linked to commercial activities or treasury financing for hedging purposes (for NFCs only);

(v) whether there is a change in EMIR classification or clearing status of that counterparty;

(vi) if that counterparty wants to report the transactions by itself.

Each counterparty must ensure that its LEI remains valid and duly renew throughout the lifetime of each transaction entered into.

Relevant weblinks:

ESMA (EU EMIR) Regulatory Documentation

FCA and BoE (UK EMIR) Regulatory Documentation