Background
Last September, the FCA and the Bank of England (BoE) made changes to the UK EMIR reporting regime. The changes were referred to as UK EMIR Refit. Following the implementation of UK EMIR Refit, reporting counterparties were required to report details of new derivative contracts in line with the new requirements. There was also a 6-month transition period for counterparties to update outstanding derivative trades entered into before 30 September 2024. The transition period ended on 31 March 2025.
Market Watch 84
In Market Watch 84 the FCA reviews UK EMIR Refit one year on and shares observations on implementation, change and vendor management. The FCA also looks at UK EMIR errors and omissions notifications.
Firms with an obligation to report derivatives under Article 9 of UK EMIR (counterparties) should consider how Market Watch 84 aligns with their existing processes and reporting frameworks. They should also consider the Reporting Q&As published by the FCA and the BoE. Market Watch 84 will also be of interest to firms subject to UK Securities Financing Transaction Regulation and UK Markets in Financial Instruments Directive transaction reporting requirements.
Future FCA work
The FCA states that its priority over the next 12 months is to improve overall data quality. To do this the FCA will:
- Continue to work closely with industry to support more accurate and complete reporting. The reporting of high-quality data is essential in enabling the FCA and the BoE to effectively monitor for systemic and financial stability risk.
- Increase its focus on reconciliation rates.
- Closely monitor breach notifications and actively engage with firms that fail to meet its expectations.
- Assess counterparties’ systems and controls to ensure they are reporting accurately. This includes being able to correct errors across both live and matured trades.
The FCA adds that counterparties should consider these workstreams and take steps to assure themselves that they have appropriate arrangements in place for each.