EMIR Refit Comes Into Effect In The UK On September 30th

EMIR Refit is set to be implemented in the UK on September 30th, five months after going live in the EU derivatives market.

In Europe, the new rules went live on April 29, 2024 and presented significant changes for firms in terms of reporting content and technical format​​, including:

Introduction of ISO20022, a global standard for financial data communication, is a key change. It requires all messaging of EMIR reports to be done according to a standardized XML structure, posing a challenge for the industry to correctly implement this new standard​​

Increased Data Fields: The new technical standards include 203 fields, an increase of 74 fields, alongside modifications to existing fields. This includes new details relating to counterparty information that organizations may need to acquire​​.

Clarifying Trade Lifecycle: The addition of the “Event Type” field aims to increase transparency around the lifecycle of a trade, providing a clearer indication of lifecycle events that trigger reporting​​.

Focus on Data Quality: The Regulatory Technical Standards (RTS) introduced by ESMA emphasize the verification of the correctness and completeness of submitted data, and the validation of lifecycle events reported for a trade​​.

Unique Identifiers: The introduction of Unique Product Identifier (UPI) and changes in the generation process of Unique Trade Identifier (UTI) are significant. The UPI complements the information captured by the ISIN and CFI code​​.

Several regulatory reporting solution providers have been helping firms in their compliance efforts. TRAction was selected by oneZero just before April.

TRAction’s co-CEO Quinn Perrott, among other industry experts, have explained the biggest challenges for brokers arising from EMIR Refit.

Now, as we approach the UK’s go-live of EMIR Refit, eflow Global launched a free audit service for firms who want to remain compliant with EU rules. From September 30th 2024, the UK EMIR Refit will introduce significant changes to derivatives transaction reporting, including:

  • the addition of 89 new data fields and formats,
  • revised reporting templates, and
  • enhanced data quality requirements.

Failure to comply will result in significant fines. eflow launched the free service after receiving multiple inquiries from organizations who were underprepared for the regulatory changes.

“Better data aggregation and risk analysis”

DTCC has been preparing for the go-live of EMIR Refit in the United Kingdom with great optimism as the new rules will improve market integrity and investor protections by enabling better data aggregation and risk analysis.

Syed Ali, Managing Director of Repository & Derivatives Services at DTCC, said: “As the financial services industry prepares for the upcoming implementation of the UK EMIR Refit on 30 September 2024, DTCC remains committed to ensuring a seamless transition for all market participants. The UK EMIR Refit represents a divergence from the EU EMIR reporting regime, with unique challenges and opportunities for those reporting under both jurisdictions.

“We recognize the complexities introduced by these new regulations, particularly the shift to standardized ISO 20022 XML reporting formats, increased reporting fields, and the mandatory use of Unique Product Identifiers (UPIs) and Unique Trade Identifiers (UTIs). We are currently in a five-month period where entities need to navigate dual reporting requirements under both the old UK EMIR and the new EU EMIR standards. DTCC has been actively engaging with clients to provide the necessary tools and support to navigate this period. We have been conducting extensive outreach, including roundtables and testing sessions, to ensure our clients are fully prepared for the new regulatory requirements.

“The UK EMIR Refit is a significant step towards a more robust and transparent derivatives market. The increased standardization of data fields and formats will enable better data aggregation and risk analysis, ultimately improving market integrity and investor protections. At the same time, broader adoption of standard reporting formats will increase interoperability and the efficiency of data exchange, reducing errors and speeding up processing times within the financial ecosystem. DTCC remains committed to supporting the industry through this important regulatory transition, fostering safer, more efficient, and transparent global markets.”

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