Join Charlotte Severs, Data Scientist at Novatus Global, as she introduces the EMIR reporting capabilities of the Novatus En:ACT platform. Discover how En:ACT automates transaction reporting, reconciliation, and compliance monitoring for OTC derivatives, reducing errors and resource strain. Learn how firms can ensure timely, accurate reporting while staying ahead of regulatory changes with ease.
EMIR Reporting with
Novatus Global
Understanding ASIC Reporting: Ensuring compliance with Australia’s derivatives reporting obligations to enhance market transparency and protect against market abuse since 2013.
What is EMIR?
The European Market Infrastructure Regulation (Regulation (EU) No 648/2012), more commonly known as “EMIR” was introduced in July of 2012. Since then, it has undergone several revisions. The latest and most significant, the EMIR Regulatory Fitness and Performance Programme (REFIT) entered into force in two phases with eligibility being updated in June 2019, and the reporting RTS and ITS entering into force in April of 2024.
The main objective of EMIR is to increase transparency, reduce systemic risk, and improve the functioning of derivatives markets in the European Union. In order to achieve these objectives, EMIR imposes obligations on financial and non-financial counterparties, as well as central counterparties (CCPs) in the following areas:
- Mandatory clearing of certain classes of OTC derivatives
- Risk mitigation techniques for non-centrally cleared derivatives such as collateralisation, timely confirmation, portfolio compression, portfolio reconciliation, and dispute resolution
- Operational risk management procedures for counterparties and CCPs
- Reporting of derivative transactions to trade repositories
In the UK, EMIR has been onshored into UK legislation via a number of statutory instruments (SIs) and Binding Technical Standards (BTS)
The data collected through reporting by counterparties is essential in ensuring effective monitoring of systemic risk by National Competent Authorities (NCAs) and the European Securities and Markets Authority (ESMA) in the EU and by the Financial Conduct Authority (FCA) in the UK
In this page, we will focus on the derivative reporting obligations in Article 9 of EU EMIR.
Who is Required to Report Under EMIR Reporting?
Financial counterparties (such as investment firms, credit institutions, insurance undertakings, AIFs, UCITS, IORPs), non-financial counterparties, and CCPs are required to submit details of derivative transactions they have concluded as well as any modifications and terminations of such contracts.
It is important to note that EMIR only imposes reporting obligations on entities established in the EU.
Are there EMIR Reporting Exemptions and who do they Apply to?
EMIR Exempt Entities
The following entities are not subject to EMIR obligations in accordance with Article 1(4)
- Members of the European System of Central Banks (ESCB) and other Member States’ bodies performing similar functions
- EU public bodies charged with or intervening in the management of public debt
- The Bank for International Settlements
- The central banks and public bodies charged with intervening in the management of public debt of the following countries
- Japan
- United Stated
- Australia
- Canada
- Hong Kong
- Mexico
- Singapore
- Switzerland
- United Kingdom
Intragroup Reporting Exemption
Certain transactions between eligible entities may also benefit from an exemption from reporting where the following conditions are met
- The transaction is between entities within the same group where at least one counterparty is a non-financial counterparty or would qualify as a non-financial counterparty if it were established in the Union
- Both counterparties must be included in the same consolidation on a full basis
- Both counterparties must be subject to appropriate centralised risk evaluation, measurement, and control procedures
- The parent undertaking must not be a financial counterparty
- The counterparties have notified their National Competent Authority of their intention to use the exemption and have received approval from the NCA
EMIR Reporting Deadlines and Requirements
Under EMIR Refit, there are 203 reportable fields covering data elements related to:
Counterparty Information
Contract information and identifiers
Trade economics
Valuation
Collateral
Margin
Details on derivative transactions must be submitted in ISO 20022 XML format to a registered trade repository within one business day (T+1) of the conclusion, modification, or termination of the transaction.
Is EMIR Reporting Single or Double-Sided?
Reporting under EMIR is dual-sided. In cases where both counterparties are established in the EU and subject to the reporting obligation, each counterparty must submit a transaction report
Consequences of Non-Compliance with EMIR Reporting
Member States have the discretion to determine the level of penalties applicable to infringements of the rules in EMIR. At a minimum, the penalties must include fines and should act as a deterrent from further infringements.
For example, France has notified ESMA that the maximum monetary penalty to be applied in their jurisdiction is EUR 10,000,000
Recently, the following fines have been imposed for EMIR reporting breaches:
- In November 2023, the Central Bank of Ireland fined investment fund GlobalReach Multi-Strategy ICAV EUR 192,500 for failure to report 200,640 derivative trades entered into between January 2018 and May 2020 by one of its sub-funds to a trade repository
- In January 2024, the Finnish Financial Supervisory Authority (FIN-FSA) imposed a EUR 90,000 administrative fine on pension provider Keva for failure to report all of its derivative transactions to a trade repository
How Novatus Global Can Streamline Your EMIR Reporting
The Novatus En:ACT platform ensures all data submitted to trade repositories meets and exceeds data quality validations required by regulators. Our platform consists of over 1,000 rules, spanning eligibility, industry best practices, and anomaly checks created by our in-house SMEs to ensure full coverage and highest levels of data quality. Each rule is linked to its source document and a rationale provided for easier analysis.
Further, En:Act analytics capabilities provide management a high-level view of their reporting performance across regimes, asset classes, and delegated reporting entities.
EMIR Reporting FAQs
Common Mistakes with EMIR Reporting
- Missing or late valuation reports
- Inconsistencies between reported product data and product classification/identifier. This is often seen where data attributes such as the option exercise style, option type, or delivery type are inconsistent with the data represented by an identifier such as the CFI code or the ISIN
- Logical inconsistencies between fields. While individual fields may contain valid values, when looked in combination with other related fields, the data is no longer accurate. This may occur where fields that are not applicable to a given product type or asset class are populated
Can you delegate EMIR Reporting?
An entity that has a reporting obligation, the “Entity Responsible for Reporting” or “ERR” may delegate the reporting to a third party. In all cases, the ERR remains legally responsible and liable for the correctness and timeliness of the details submitted on its behalf by a third party.
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