EMIR establishes the reporting obligation on both counterparties that should report the details of the derivative trades to one of the trade repositories TRs , i. This obligation covers both financial and non-financial counterparties. Only the individuals are exempted from the obligation to report their derivatives trades. However as their counterparty is usually a financial institution, the latter has the obligation to report those trades.

EMIR sets obligations and requirements applicable to the non-financial counterparties that enter into derivative contracts thus expanding the coverage of the regulation. EMIR requires reporting of the transaction details for both types of derivatives trades — exchange traded derivatives ETD and OTC derivatives.

For example, the derivative contracts traded on MTFs multilateral trading facilities are OTC derivatives in the context of EMIR. The exchange traded derivatives EDT are not explicitly defined under EMIR. Please note that EMIR does not cover the following: From practical point of view the minimum required information to be reported is separated into two main categories:. All OTC derivative contracts and exchange traded derivatives should be reported to one of the registered trade repositories.

Please find below a list with the trade repositories that have been registered by ESMA:. In order to assist you finding the best solution for your EMIR reporting we can perform an evaluation of the IT infrastructure of the company as well as available the resources and the type of the instruments and the number of trades that should be reported.

We can suggest the best cost effective option for your EMIR reporting solution. Generally there are three main options:. EMIR Reporting Ready, Ltd. LEI stands for Legal Entity Identifier. It is a unique sequence of numbers and letters that identifies the counterparties, CCPs, beneficiaries and brokers. The information about the LEIs of all your partners and clients legal entities is essential for successful transaction reporting.

UTI stands for Unique Trade Identifier. It identifies a specific trade and is generated under certain rules provided by ESMA.

Before reporting the counterparties should agree on which form of unique trade identifier they will use. This is required in order to ensure accurate identification of reported trades by both counterparties. This was established in order to improve the ability to reconcile trades both with and between counterparties, CCPs and trade repositories, and reduce the likelihood of duplicate reporting.

However, due to the low pairing rates of the trade repository reconciliation process, ESMA has tightened up the requirements about UTI generation and usage. Since the 12 th of Feb there is the obligation to report the derivative transactions.

The deadline to report the transaction is the day after the transaction was executed, i. The deadline for reporting back-dated transactions, i. This data relates to the Counterparty Data fields 17 to 26 inclusive, which consists of five fields of Valuation data and a further five of Collateral data.

The legal grounds are outlined in the following key sources:. The additional information regarding collateral and valuation is provided in the EMIR table 1, Counterparty Data, fields 17 to Please refer to the table below. ESMA requires that the primary valuation methodology which should be used is mark-to-market.

This does not mean that the report should always be made by the CCP. The CCP may make data available to the counterparties, so that the latter can report. The changes in mark-to-market or mark-to-model valuations on already reported transactions need to be reported on a daily basis end of day.

The mark-to-market value should be based on the End of Day settlement price of the market or the CCP from which the prices are taken as reference. If an End of Day settlement price is not available, then the mark-to-market value should be based on the closing mid-price of the market concerned.

As the valuation is part of the Counterparty data fields, in the case of derivative not cleared by a CCP, the counterparties do not need to agree on the valuation reported. The collateral should be the sum of any initial margin or similar posted by the reporting counterparty and any variation margin or similar also posted by the reporting counterparty.

There is no obligation to report collateral received by the reporting counterparty to avoid double-counting and for that reason if the variation margin is flowing in the opposite direction to the initial margin, it would be the other counterparty that would have to report the variation margin on their report.

Collateral can be reported on a portfolio basis and should be reported at the total market value that has been posted by the counterparty responsible for the report. Any haircuts or similar used by the receiver of the collateral and any fees or similar amounts should all be ignored.

Furthermore the fact that certain types of collateral might take a couple of days to reach the other counterparty should also be ignored. This means the reporting of each single executed transaction should not include all the fields related to collateral, to the extent that each single transaction is assigned to a specific portfolio and the relevant information on the portfolio is reported on a daily basis end of day.

Currently there is no field that specifies the type of collateral.

EMIR reporting obligation

Since 1st Nov different fields related to the different types of collaterals will be introduced. A collateral portfolio with multiple currencies should be normalised to the base currency because currently there is only one collateral value field Table 1, Field 25 and one associated currency field Table 1, Field 26 on a report by a Counterparty.

Therefore all collateral for a single portfolio should be reported in one single currency value. The reporting counterparty is free to decide which currency should be used as base currency as long as the base currency chosen is one of the major currencies which represents the greatest weight in the pool and is used consistently for the purpose of collateral reporting for a given portfolio.

Please note that currently there is no obligation to report collateral received to avoid double-counting and therefore if the variation margin is flowing in the opposite direction to the initial margin, it would be the other counterparty that would have to report the variation margin on their report. The fields that specify the type of the collateral will increase from 1 to 6 different fields: In case the collateral agreement allows the covering of exposures in transactions that are not reportable under EMIR, the value of the collateral reported should be just the collateral that covers the exposure related to the reports made under EMIR.

If it is impossible to distinguish within a pool of collateral the amount which relates to derivatives reportable under EMIR from the amount which relates to other transactions the collateral reported can be the actual collateral posted covering a wider set of transactions. ESMA advises All collateral for a single portfolio should be reported in one single currency value.

The reporting counterparty is free to decide which currency should be used as a base currency as long as this base currency is one of the major currencies and is used consistently for the purpose of collateral reporting for a given portfolio. Valuation update V in field No. Collateral should be reported at the same level at which it has been posted.

If collateral has been posted against a portfolio of trades or positions, for example, then the details should be reported at the portfolio level. On 21 January the revised RTS and ITS have been published in the Official Journal. Reporting obligation under art.

What should be reported under EMIR? From practical point of view the minimum required information to be reported is separated into two main categories: To whom should be reported? Please find below a list with the trade repositories that have been registered by ESMA: Trade Repository Derivative asset class Effective date DTCC Derivatives Repository Ltd. How the derivatives can be reported?

ESMA gives clarity on exchange-traded derivatives reporting | The Trade

Generally there are three main options: Direct reporting to the TR: Delegated reporting to a counterparty: Delegated reporting to a third party solution: What are the deadlines? When to start collateral and valuation reporting? The legal grounds are outlined in the following key sources: What additional data to be reported on and after 12th August ? The valuation should be performed on a daily basis. Uncollateralised; One-way Collateralised; Partially collateralized; Fully Collateralised. Portfolio means the collateral calculated on the basis of net positions resulting from a set of contracts, rather than per trade.

Where collateral is posted on a portfolio basis, this field should include the value of all collateral posted for the portfolio. How to calculate the mark-to-market value? For uncleared business, the contracts should be valued by the counterparties themselves. The mark-to-market value should represent the absolute value of the contract. Should the valuation reported be agreed between the counterparties? How to calculate the value of the collateral? Which currency to be used as the collateral base currency?

How the change in the amount of collateral should be reported? Should the collateral details be reported at the trade, position or portfolio level? What are the changes in RTS since Nov ? In case the fields in the report do not allow reporting of a complex products by a single line, then the counterparties should decompose the contract and agree on the number of lines with separate UTIs that should be submitted. The existing contracts shall be reported as terminated and the new contracts resulting from the transaction shall be reported.

For contracts concluded and cleared on the same date, only the cleared contract shall be reported. For swaps, futures and forwards traded in monetary units the notional amount should be the reference amount from which the contractual payments are determined in derivatives markets. For options the notional amount should be calculated using the strike price. Financial CFDs and commodities denominated in units like barrels or tons — the resulting amount of the quantity at the relevant price set in the contract.

More new fields like: Identification and classification of the derivatives. The ETDs will be identified by ISIN or AII.

The OTC derivative contracts will be identified by their types. Two more categories are added: Unique Trade Identifier UTI. The UTIs of the cleared trades should be generated by the CCPs. For centrally-executed bit not centrally cleared trades the UTI shall be generated by the trading venue. For centrally confirmed and cleared trades the UTI generation obligation is placed to the clearing member. For trades that were centrally confirmed by electronic means but were not centrally cleared the UTI should be generated by the trade confirmation platform at the point of confirmation.

Financial counterparties FC trading with non-financial counterparties — the FCs. For all other cases — the seller is responsible to generate the UTI and communicate it to the buyer. The UTIs should be generated and communicated in a timely manner so that the other counterparty can meet its reporting obligations.

Questions Who should report under EMIR? Date of the last mark to market or mark to model valuation. Whether collateralisation was performed. Whether the collateralisation was performed on a portfolio basis. If collateral is reported on a portfolio basis, the portfolio should be identified by a unique code determined by the reporting counterparty. Value of the collateral posted by the reporting counterparty to the other counterparty.