What Is EMIR And How Could It Affect You?

European Market Infrastructure Regulation (EMIR) has the objective of increasing market and price transparency through the disclosure and availability of information on OTC derivatives contracts. As a result of EMIR, and with effect from the 12th February 2014, all parties subject to EMIR regulations must submit all derivative trading activity to a registered European Trade Repository by end of day (EOD) + 1. This includes all OTC derivatives, exchange-traded derivatives, and FX forwards and FX swaps.

Reporting is expected to be split by asset class: Rates, Credit, FX, Equity and Commodities.

Reporting entities can delegate their reporting requirements to a third party service provider but ultimate legal responsibility for trade reporting will remain with the counterparty.

Service offering

The MSE has entered into an agreement to be a 'Member' with Regis TR, a recognised Trade Repository, in order to fulfill the role of 'Reporting Third Party'. The MSE, as a recognised Member, shall not be a party to a derivative transaction, but will be duly appointed by an Appointing Counterparty to be responsible for the reporting of the related contractual data to the Trade Repository on its behalf.

The method to be adopted for the data submission will comprise of a .csv file, with predefined fields and data completion parameters, which will need to be completed by the Appointing Counterparty, and submitted electronically in a secure manner to the MSE who shall be responsible to process this data onwards to the Trade Repository. The format and structure of the file will be submitted to the Appointing Counterparty, and cannot be amended in any way.

The Appointing Counterparty shall be responsible for the completeness and correctness of the data submitted, on its own behalf, as well as on behalf of other corporate entity counterparties as the case may be.

The Appointing Counterparty shall have a Legal Entity Identifier (LEI), and it should therefore be the LEI of each counterparty to the trades that are reported. It is up to the Appointing Counterparty to take the necessary steps to obtain its LEI.

Data input and transfer

The MSE shall provide all the necessary assistance in the setting up and testing of the networking and data transfer systems required in order to compile and process the Contractual Data. Templates for the reporting of new trades, amendments to the trades, and closed trades will be supplied, as well as templates for the reporting of valuations and collateral.

The official Reporting Start Date was 12th February 2014, and the data in respect of trades that were still open on that date and were entered into with effect before or after 16th August 2012 also needs to be reported.

If you still need to comply with EMIR reporting requirements, or may be required to do so due to new trades being effected, and are looking for a cost effective solution to carrying out this obligation, the Malta Stock Exchange can help. We offer a reporting process that is affordable, particularly if you don't have volumes to report, efficient and supported by a professional support service.

For further information, please contact:

Cliff Pace
Business and Product Development Manager
Malta Stock Exchange plc
Garrison Chapel
Castille Place
Valletta VLT 1063
Tel: 00356 21244051
Mob: 00356 99445874
Email: cpace@borzamalta.com.mt

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.