Accelerated EMIR Refit Readiness Assessment

Accelerated EMIR Refit Readiness Assessment.

EU & UK EMIR Refit: Reporting Readiness Assessment Background

The European Commission’s regulatory fitness and performance programme (Re-FIT) reviewed existing legislation to make sure it delivered the intended benefits and simplified rules where possible. The EU EMIR Refit reporting deadline is now confirmed for the 29th April 2024, with the UK implementing its regime 5 months after this date on the 30th September 2024.

Scope & Key Challenges Who is impacted?

Key Challenges

f Firms trading derivatives on a Trading Venue or Over-the-counter (OTC) in the EU or UK: f Financial Counterparties: including Banks, Investment Firms, Insurance Firms, Fund Managers, Occupational Pension Schemes, Central Security Depositories. f Non-Financial Counterparties. f Also: f Central Counterparties (CCPs). f Trade Repositories.

f The vast number of fields (203), lifecycle reporting and the requirement to match trades along with reporting in ISO 2022 XML format will be a challenge for many firms. f Firms using delegated reporting will need to significantly improve monitoring the reporting performed on their behalf. f AIFMs, UCITs Management Companies and entities managing & acting on behalf of an IORP [Occupational Pension Schemes] are specifically called out as being legally liable for reporting their OTC trades. f Focus on high data quality and detail: New reconciliations & procedures required by trade repositories. Reconciliation reporting to counterparties.

Timelines

UK: 24th March 2023 Final versions of the Validation Rules and XML schemas expected shortly after this date.

UK: 30th September 2024 Deadline for reporting, phase 1 trade repository reconciliations (final rules were published on 24th Feb in PS 23/2).

EU: 29th April 2024 Deadline for reporting, phase 1 trade repository reconciliations.

UK: 31st March 2025 Reporting counterparties are to update all outstanding derivative reports to the new requirements; TRs to submit updated trade state reports for all historic open trades.

EU: 29th October 2024 Reporting counterparties are to update all outstanding derivative reports to the new requirements.

UK: 30th September 2026 Phase 2 trade repository reconciliations (note: FCA draft validation rules).

EU: 29th April 2026 Phase 2 trade repository reconciliations.

EMIR Refit Reporting De-mystifying key challenges The EMIR Refit report is the biggest trade report in terms of the number of fields proposed by regulators for any regulation.

EMIR

EMIR Refit

125 Fields

203 Fields

Along with a significant increase in the number of fields, there are other challenges in EMIR Refit.

Other significant challenges: Xml Schemas

f ISO 20022 standard XML schemas will be used for data exchange between reporting firms, Trade Repositories (TRs) , and regulators. f Inter TR reconciliation will also use the same ISO 20022 standard XML data standards.

UTIs

f The Unique Trade Identifier (UTI) generation waterfall model has been changed. f This change will impact counterparties’ existing UTI generation agreements and processes.

UPI

f Derivatives trades not identified by ISIN (International Securities Identification Number) require UPI (Unique Product Identifier) reporting. f The UPI must be sourced from ANNA-DSB using underlying instrument reference data parameters.

17 Fields present in the old that are not present in the new

97 Fields present in the new that are not present in the old

106 Fields present in both the old and the new f 34 Reporting format changes f 19 details to be reported changes f 28 fields impacted by both above f 25 fields have not changed

Event & Lifecyle Management

f Regulators have introduced a new “Event Type” field to align trade reporting with realworld trade life cycle events, in addition to the “Action Type” field.

How Can Delta Capita Help?

EMIR REFIT Readiness Assessment powered by our Proprietary Accelerator

Advanced Regulatory Data Analytics

Value Added Consultancy Service

Our EMIR Refit assessment accelerator is a proprietary tool – developed in partnership with Reg-x Innovations, that comprises algorithms to ingest and analyse new and existing reportable data against the EMIR Refit ruleset.

As part of our Consulting Service, our team will also work with your operational and technology stakeholders to address the other challenges that EMIR Refit brings to your regulatory reporting operating model by:

Our accelerator will process data from the firm’s trading platforms and trade repositories to analyse reportable fields and data reporting errors to provide the client with an automated report that comprises–

f Scoping legal entities to confirm EU Vs UK reporting requirements f Conducting an impact assessment on relevant functions – Regulatory Reporting, Reconciliations, and other impacted business processes f Recommending relevant options for XML to CSV conversion and vice-verse, UTI/UPI retrieval and regulatory reconciliations f Detailed trade events and lifecycle mapping to EMIR REFIT Requirements f A detailed Regulatory traceability matrix

f Data gaps for new EMIR Refit fields f Mappings for EMIR Refit fields (incl. UPIs and UTIs) i.e. how existing data fields map to revised EMIR Refit field f Visual representation of data lineage for EMIR REFIT field and f Any errors in your current EMIR reporting (if identified)

Our consultants can also help develop a detailed roadmap to implement the changes for EMIR REFIT Compliance including implementation and regulatory testing support.

Contacts

To learn more about our range of services to assist you in complying with EMIR Refit Reporting requirements, please contact: f Karan Kapoor (Global Head of Regulatory Consulting): Karan.Kapoor@deltacapita.com f Michael Robertson (UK Head of Consulting): Michael.Robertson@deltacapita.com

Our Relevant Credentials Leading Trade Repository and Regulatory Reporting Platform

Leading global financial markets infrastructure

US multinational investment bank

Japanese Asset manager

Global Wholesale bank

07/21 - 03/22

09/22 - ongoing

12/21 - 04/22

06/20 - 11/20

01/23 – 03/23

02/21 - Ongoing

Delta Capita supported a Post Trade firm to conduct a regulatory impact assessment.

Delta Capita is supporting clients onboard on to the report Hub for EMIR, SFTR and MIFID Transaction Reporting.

Delta Capita completed full account mapping of (i) existing EMIR clients, (ii) existing client (nonEMIR clients), and (iii) UV targets as part of a formal customer research assignment to directly inform their EMIR Refit product launch set for Q2 2023.

Delta Capita provided daily support of the team pertaining to EMIR regulatory control, delegated reporting, MiFID II, UMR, mandatory clearing and adherence checks for new and existing clients.

Implemented EMIR middleware in a complex application landscape, automating manual processes and performing regulatory reporting data quality. EMIR Refit implementation is in plan.

Performing regulatory reporting data quality checks on MiFID II, EMIR and SFTR reporting on monthly basis. Helping in remediation resulting in overall data quality improvement.

About Delta Capita

Delta Capita is headquartered in London with offices around the world.

As a Business Operating Platform as a Service (BO PaaS) and Consulting Services provider, we work with the world’s top financial institutions to help them comply with regulations, simplify operations, reduce costs, innovate their business models, and leverage leading fintechs.

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Delta Capita, the financial services division of Prytek, is a leading global managed services, technology solutions and consulting provider with a unique combination of experience in financial services and capability in technology innovation.

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