EMIR Refit’s impact has been transformative, opening up a new perspective on technology and an abundance of opportunity for innovation, writes Steve Walsh, product and solutions director at Duco.
Global market and regulatory initiatives continue to dominate the agenda, with T+1 settlement coming to Europe and the UK in 2027, and US Treasury clearing set for 2026.
Financial firms must stop relying on one-off, short-term fixes and instead shift to strategies that allow for ongoing adaptability and long-term resilience.
The EMIR Refit’s transformative impact
The EMIR Refit, which came into force in April 2024 in the EU and in September 2024 in the UK, is an update to the original European Market Infrastructure Regulation (EMIR), aimed at improving the quality, consistency, and transparency of derivatives reporting. It introduced new ISO 20022 messaging standards, expanded the range of reportable data fields from 129 to 203, and imposed stricter requirements for data validation and reconciliation across trade repositories.
The Refit aims to amend and simplify the original regulation by addressing disproportionate compliance costs, improving transparency, and enhancing access to clearing for certain counterparties. It also promotes greater harmonisation and standardisation across EU and UK regulatory frameworks, which is vital for consistent reporting and improved operational efficiency.
The Refit forced firms to confront long-ignored issues: fragmented systems, manual reconciliation, and inconsistent data quality. Long dismissed as ‘minor inefficiencies’, these gaps were exposed as true operational liabilities. The regulation’s heightened demands around data integrity, granularity, and completeness exposed just how fragile many firms’ middle- and back-office infrastructures had become.
The new rules set higher standards for data accuracy and reporting completeness. That means firms must have robust capabilities – including controls that check data integrity – to meet those standards.
The end of excuses
The true impact of the EMIR Refit extends far beyond its specific requirements. It introduced an era of increased expectations that continues to influence how regulators approach oversight and how firms plan their compliance strategies.
With cloud-native platforms and AI at their fingertips, firms can’t plead ignorance – regulators now expect precision as standard. Machine processing capabilities, advanced analytics platforms, and better algorithms have removed traditional excuses for poor data quality or incomplete reporting. Regulators have stronger grounds to impose significant penalties and fines on institutions whose infrastructure isn’t fit for purpose. “We didn’t know” won’t work as an excuse.
Previously, firms that delegated reporting performed weekly or monthly data quality checks on the data reported service providers. Under the Refit, however, delegation no longer means abdication. Firms with reporting obligations now recognise that, while they can outsource the task of reporting transactions, they remain fully accountable for data quality. This includes not only ensuring trades are submitted, but also that they are reported in line with the required validation rules.
Regulators maintain a clear stance on this issue and hold the firm, not the service provider, accountable for the accuracy, timeliness and completeness of all regulatory submissions.
The role of third parties
For many firms, partnering with third-party vendors has emerged as a safe route to compliance, particularly in areas where the burden of ongoing updates and testing is substantial. These partnerships can provide access to specialised expertise, proven technology platforms, and the economies of scale that come from serving multiple clients with similar needs.
This approach requires careful consideration of vendor capabilities, integration requirements, and ongoing oversight responsibilities. The most successful partnerships involve vendors who understand not just the technical requirements of current regulations, but also the general direction of travel, the likely future state of the regulatory system. Choose a partner wisely.
The accelerating pace of change
With every successful rule change, the bar is raised for subsequent changes. Two important test cases loom: The US Treasury’s Central Clearing requirements mandate central clearing of eligible cash trades by the end of 2025, with repo transactions following by mid-2026. Meanwhile, the EU’s T+1 settlement cycle is also scheduled for October 2027.
On one hand, regulators are demanding more speed and higher volumes from businesses and on the other, regulators are becoming stricter in their expectations for data quality and reporting accuracy. That means upgrading infrastructure to integrate with CCPs and CSDs, deploying real-time matching, and automating exception handling at scale. Any remaining manual workarounds won’t survive the new oversight requirements, comprehensive audit trails, and more frequent regulatory reporting to manage the new operational risks that emerge from faster, higher-volume processing.
These overlapping timelines require the creation of more stringent risk and control frameworks to ensure on-time deployment.
The industry is now creating the foundation of smarter trading, sharper risk management, and better capital allocation. This is the EMIR Refit’s true legacy: a new perspective on technology, operations, and risk management and their overall enterprise value. New changes, coming fast, will punish fragility while rewarding firms that treat data accuracy and automation as strategic assets. Get ready for tools that truly enable faster decision-making, not just regulatory defence.