On 17 December 2020, the European Securities and Markets Authority (ESMA) published a final report containing technical standards on reporting, data quality, data access and registration of trade repositories under EMIR REFIT.
The layout of the final report is as follows:
- Section 1 contains the list of legislative references and abbreviations used in the report.
- Section 2 is the executive summary of the document.
- Section 3 explains the background to the proposals.
- Section 4 includes the summary of feedback on ESMA’s proposals with regard to the reporting by the counterparties to trade repositories (TRs). In particular, it summarises the feedback on the methods and arrangements that the counterparties should have in place to notify Member State competent authorities about errors and omissions in reporting as well as methods and arrangements to ensure resolution of reconciliation failures and correct reporting under new EMIR REFIT provisions on allocation of responsibility for reporting. The section also summarises the proposal concerning data standards to be used in the reporting, such as LEI, critical data elements including UTI and UPI, as well as use of ISO 20022 XML as the technical format for reporting. Section 4 also discusses in detail proposed changes in the reporting logic, notably the revised approach to reporting of lifecycle events and reporting at position level, as well as providing an overview of the updated list of details of the derivatives to be reported. Finally, the section summarises the feedback regarding the date of application of the revised technical standards and the requirement to duly update the derivatives that will be outstanding on that date in order to ensure higher quality of the data.
- Section 5 includes the summary of feedback on ESMA’s proposals on the procedures that the TRs should have in place for the data collection, update of a LEI and reconciliation of data.
- Section 6 covers the feedback to the requirements regarding types of responses that TRs are expected to provide to reporting counterparties, entities responsible for reporting and report submitting entities.
- Section 7 explains the additional provisions related to the registration of the TRs and includes a specific provision related to the extension of registration from the Securities Financing Transaction Regulation to EMIR.
- Section 8 details the proposals regarding the terms and conditions of data access by the authorities.
- Section 9 clarifies that ESMA will aim at delivering the amendment to the technical standards on publication of aggregate data by trade repositories at a later stage.
- Section 10 contains all relevant appendices, including the legislative mandates, reference to the opinion of the Securities and Markets Stakeholders Group, commentary on the cost-benefit analysis and the texts of the draft regulatory and implementing technical standards.
The draft technical standards have been submitted to the European Commission, and the proposed timeline for implementation of the technical standards by the reporting counterparties and TRs in the EU is 18 months from the date of their publication in the Official Journal. In the meantime, ESMA will commence working on the guidelines on reporting under EMIR REFIT as well as on the technical documentation, including XML schemas and validation rules. ESMA aims to provide the industry with the relevant guidance and documentation sufficiently ahead of the reporting start date to ensure a smooth transition to the reporting under the revised rules.