Industry continues push for standardised EMIR derivatives reporting

Reporting of derivatives transactions under EMIR has proved problematic for firms and regulators, as trade groups call for a standardised approach.

Several major trade associations have teamed up to publish a set of guidelines aimed at standardising reporting of derivatives transactions under the European Market Infrastructure Regulation (EMIR).

The EMIR Reporting Best Practices report covers 87 data points across 61 reporting fields for both OTC and exchange-traded derivatives. The groups that published the report said the report is looking to improve the accuracy and efficiency when firms complete certain data fields.

It was produced and published by the International Swaps and Derivatives Association (ISDA), the European Fund and Asset Management Association (EFAMA), the European Venues and Intermediaries Association (EVIA), the Futures Industry Association (FIA) and the Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association (GFMA).

Under EMIR, EU firms must report all over the counter (OTC), exchange-traded, cleared and non-cleared derivatives transactions to registered trade repositories. However, firms are completing data fields differently, leading to major matching errors on individual trades. Last year, the EU markets watchdog estimated the matching rate was just 40%.

“The guidelines around how firms should complete certain data fields will create higher rates of pairing and matching, therefore increasing the accuracy of trade reporting,” trade repository DTCC said in response. “This improvement will provide regulators with a better view of derivatives transactions and hence highlight more accurately risk in the financial system generated by this trading activity, which was the original intention of the policymakers at the 2009 G20 Pittsburgh summit.”

The reporting requirements have proved to be difficult for national regulators. According to a peer review assessment of regulators in Europe looking at how they are handling EMIR data, the UK’s Financial Conduct Authority was found to be “lagging behind” in certain areas. The FCA hit back against the claims, stating it did not believe the review was supported by evidence and explanations provided during the review process.