On 13 July 2018, the CSSF published a press release stressing its attention on the accurate reporting of derivative transactions. This is relevant to all parties within scope of the European Market Infrastructure Regulation (EMIR), of which the CSSF is the supervisory authority. The communication follows up questionnaires sent to banks in winter 2017 and letters sent individually to non-financial counterparties in spring 2017 regarding EMIR reporting.
To put the press release into context, the latest updates to the EMIR reporting framework entered into force on 1 November 2017. They introduced inter alia new requirements for market data which, in our experience, have caused some difficulties. Specifically, standardised identifications have not always been available, e.g. the Legal Entity Identifiers (LEI) of each counterparty, the Unique Trade Identifier (UTI) of each transaction, or the International Securities Identification Number (ISIN) of the underlying asset. In addition, many have failed to harmonise data transmitted under MiFIR with the EMIR requirements.
One and a half years later, the CSSF now aims to ensure that these obstacles have been overcome. The following items, as outlined in the press release, have been deemed indicators that a company is not fully up-and-running with its EMIR reporting duties:
- unpaired or matched standardised identifications for reports of one transaction that were sent separately by two counterparties ("Double Sided Reconciliation")
- inaccurate market information, such as publicly available identifiers of instruments, benchmarks, or stakeholders
- report rejections sent by the trade repository, especially in conjunction with the new validation rules; and possible delays in reporting due to having to fix issues
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KPMG helps companies remain EMIR-compliant. Drawing on our expertise, we have developed a Health Check that can quickly and thoroughly assess your reporting process and find gaps and inefficiencies. Please contact me or visit our webpage for more information.
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