PwC: Trade repositories authorised - countdown to EMIR reporting begins

Published at 17:23 PM on 07 November 2013

The European Securities and Markets Authorities  has today approved the first trade depositories under European Market and Infrastructure Regulation (EMIR) which means that all derivative counterparties will need to begin EMIR regulatory reporting from 12 February, 2014

As a result, any derivative counterparty in the European Economic Area (EEA) that is subject to EMIR, including corporates and other unregulated market participants, will be required to provide complex reports for transactions in all derivative asset classes (interest rates, foreign exchange, equity, credit and commodities) and for both over-the-counter (OTC) and exchange-traded derivatives from 12 February 2014.

 The new reporting obligation will require substantially more detailed information than regulated firms are currently reporting to the Financial Conduct Authority (FCA). Firms will need to manage the new derivative reporting regime in parallel to the existing FCA reporting regime. Corporates and unregulated counterparties which currently have no reporting obligations must build or delegate reporting to meet this new requirement.    

 Crispian Lord, regulation partner at PwC, said:

 “Firms only have a few months to get to grips with this new regulation and there are significant risks to getting it wrong. It may seem fairly straightforward, but the extent of the data required is troubling many in the market and experience shows that it doesn’t take much to get this reporting wrong, with significant consequences.

 “The internal system interactions can be complex and vulnerable to corruption from direct and contingent system changes. As such, reporting parties need to ensure that there are control processes to identify errors. Also, where you plan to delegate the reporting function to a third party, this does not delegate the responsibility of getting it right.

 “Our work in the market over the past few years with clients found that the fines levied for incorrect transaction reporting can be substantial, but the remediation costs and management time associated with these issues can result in costs that are many multiples of the fine.”

 END

  • EMIR fulfils several of the Over the Counter (OTC) derivative market reforms agreed by G20 countries to reduce systemic risk and bring more transparency to both OTC and listed derivatives markets. The EMIR reporting obligation is designed to give regulators a comprehensive view of derivative trading conducted in the EEA. Every derivative counterparty will be required to submit a report to an EMIR authorised trade repository when it enters into, modifies, or terminates a contract.  Trade repositories would then be required to ensure that the trades are reconciled. 

Media contact:

Katherine Howbrook, Financial Services media relations manager, PwC

Tel: 020 7212 2711/07595 609 737

Email: [email protected]


Twitter
LinkedIn
Facebook
Google+

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

« Workplace pension reforms - PwC's head of pensions comments | Homepage | Typhoon Haiyan - PwC comments on effect on insurance »

  • Contact us
  • +44 (0) 20 7213 1768

Specific and out of hours contacts