On 25 November 2020, the FCA issued a statement explaining what trade repositories (TRs), and the UK counterparties that use them, should do to make sure they are compliant with the onshored European Market Infrastructure Regulation (UK EMIR) reporting obligations following the end of the transition period. The statement replaces the statement the FCA originally published in March 2019.
The statement covers the following topics:
- What changes for UK counterparties?
- Temporary transitional powers: exception for EMIR reporting and TR requirements.
- Reporting of new and outstanding trades under the UK EMIR reporting regime by counterparties in scope.
- UK EMIR validation rules.
- EU non-legislative material.
- Intragroup exemptions from the reporting obligation under UK EMIR.
- Mandatory delegated reporting under UK EMIR.
- What changes for TRs?
- Historic EMIR data.
- Inter-TR reconciliation under UK EMIR.
- Publication of TR data.
- Data access for authorities.
- Suspension of the reporting requirements.
- List of third country regulated markets under UK EMIR.
In terms of the first item above concerning changes for UK counterparties, the statement notes that from the end of the transition period, all UK counterparties that enter into a derivative contract (both over-the-counter and exchange-traded derivatives) are in scope of the UK EMIR regime and required to report details of those transactions to an FCA-registered, or recognised, TR according to the UK EMIR regime. The statement adds that:
- UK branches of firms established in a third-country (including branches of firms from EU27 countries) are not in scope of the UK EMIR reporting regime and so do not have to report under the UK EMIR regime.
- Third country (including EU27) branches of firms established in the UK are in scope of the UK EMIR reporting regime and must report details of their derivative transactions to an FCA-registered, or recognised, TR.
- Alternative Investment Funds that are not established in the UK but are managed by an alternative investment fund manager authorised or registered under the UK Alternative Investment Fund Managers Regulations, are in scope of the UK EMIR reporting regime.
- No action is required by UK TRs in relation to Gibraltar counterparties (unless it is requested by those parties). However, TRs should confirm their position with the Gibraltar FSC in relation to the obligations imposed by the law of Gibraltar.
- From the end of the transition period, EU counterparties are not in scope of the UK EMIR reporting requirements. The following transactions are not in scope of UK EMIR and will not be required to be reported to a UK TR:
- Derivative transactions entered into by 2 EU27 counterparties that are traded on a UK trading venue.
- Derivative transactions entered into by 2 EU27 counterparties denominated in GBP.
- Derivative transactions entered into by 2 EU27 counterparties where the reference entity of the derivative contract is located in the UK or where the reference obligation is UK sovereign debt.