EMEA Regulatory Reporting Update

The EMIR REFIT got its official go live date of April 29, 2024. While still distant, the date has triggered an 18-month countdown. This has increased the number of questions from clients related to how to prepare. See below:

What about the UK EMIR and divergence?

At the moment we don't yet have a firm date when the FCA will implement the EMIR update in the UK. Expectations are that it will go live in September or October 2024. While the regulation standards are very similar to ESMA EMIR, the challenge for firms with EU and UK entities is supporting to formats of submissions. This is especially the case for UK firms providing delegated reporting to EU counterparties where they will need to be ready with the new formats at the April 2024 period.

How does updating existing positions to the new format work?

Part of the REFIT entails the requirement to update open positions with new data fields within 180 days of the go-live. This is done through submitting the UTI with the 'Update' action type message and entering the new data points. In Cappitech's analysis of implementing the REFIT, we believe there are benefits in applying the updates from day one as much of the updated information is required for other new transactions.

How long do I need to prepare?

The answer to this question is company specific. But what we can say is look at the CFTC update for reference. Industry-wide surveys have shown that firms struggled to meet the December 5th 2022 deadline in time. This is even after a 6-month delay to the go-live date which provided a longer preparation period. While the EMIR REFIT update isn't as vast of a change as that of the CFTC, there are several significant changes that will inevitably take longer than expected to align with.

Will new enrichment solutions be available?

External enrichment and validation options gained momentum when MIFID II went live in 2018 as a number of vendors providing solutions for ISIN generation and TOTV eligibility. Companies then started to leverage product and Unique Transaction Identification (UTI) enrichment under SFTR in 2020. With proven benefits of enrichment solutions, firms are now asking if such products will be available for the REFIT to cover the new Unique Product Identifier (UPI) field as well as pre-submission UTI enrichment. Such options are being built to support EMIR with Cappitech covering both UPI and UTI enrichments as well as other counterparty identification offerings.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.