All counterparties are required to report details of any derivative contract (OTC or exchange traded) they have concluded, or which they have modified or terminated, to a registered, or recognised, trade repository (TR) under EMIR reporting requirements.
UK EMIR validation rules
UK reporting counterparties and UK TRs should use the UK EMIR validation rules we published on 18 September 2020 when submitting derivative transactions entered into from 11.00pm on 31 December 2020 onwards.
Please note, these validation rules also include references to future amendments to the rules which will apply from 1 February 2021.
EMIR breach notification form
Firms can use this form to notify the FCA about any errors or omissions in their reports under Art. 9 of EMIR. Completed forms should be sent to [email protected].
On 14 July 2020, an updated version of the form was published to make some minor changes but also to incorporate the changes to the reporting requirements pursuant to Article 9(1a) to (1e) of EMIR REFIT. Firms should complete and submit this updated form going forward.
Firms should note the following when completing the form:
- For firms who have provided date(s)/timeframe(s) by which they intend to complete remediation of the reported issues, back report the impacted transactions, and/or carry out improvements in their systems and controls, we request an update is sent to us by the stated date(s)/timeframe(s).
- For firms who are taking a multi-stage approach to remediation and have provided any date(s)/timeframe(s) by which the individual stages are expected to be completed, we request periodic updates are sent to us by the stated date(s)/timeframe(s).
- For firms who have been unable to fully answer any of the questions in the form, but have stated a date(s)/timeframe(s) by which a complete answer will be available, we request that further information is sent to us by the stated date(s)/timeframe(s).
Reporting requirements to TRs
Choosing a TR
EMIR trade reports may only be submitted to TRs which are registered or recognised by the European Securities and Markets Authority (ESMA). A list of registered TRs can be found on the ESMA website.
It is possible to meet the reporting obligation by reporting to any ESMA-registered or recognised TR.
Details to be reported
The details to be reported are set out in the EMIR reporting technical standards (see the EMIR Library).
How to fulfil the reporting obligation
- Subject to the below changes brought in under EMIR REFIT set out below, both counterparties must report their side of the trade unless by prior arrangement, one party can report on behalf of both counterparties. Where one report is made on behalf of both counterparties, the report shall indicate this fact.
- The EMIR technical standards set out what information shall be submitted in relation to each of the counterparties, and what information shall be submitted only once.
- Either counterparty to the trade may delegate reporting to a third party (such as a central counterparty or trading platform).
- Where one counterparty reports on behalf of another counterparty, or a third party reports a contract on behalf of one or both counterparties, the details reported shall include the full set of details that would have been reported had the contracts been reported by each counterparty separately.
Changes to EMIR reporting brought in under EMIR REFIT
Please find below a high-level overview of key changes to EMIR reporting resulting from EMIR REFIT. For full details of these changes, please refer to EMIR REFIT.
- From 17 June 2019, the EMIR reporting obligation applies only to derivative contracts which (a) were entered into before 12 February 2014 and remain outstanding on that date or (b) were entered into on or after 12 February 2014. This means that derivative contracts that were outstanding on or after 16 August 2012 and terminated before 12 February 2014 do not need to be reported. This was to address concerns over difficulties with what has become known as “backloading” in relation to these derivative contracts.
- EMIR REFIT provides that derivative contracts within the same group where at least one counterparty is a non-financial counterparty (or would be qualified as a non-financial counterparty if it were established in the Union) are exempt from the reporting obligation provided that specific conditions are met. Counterparties intending to take advantage of this exemption first have to notify their competent authorities. Please see the FCA’s EMIR notifications and exemptions webpage for more information on how to notify the FCA. The exemption will be valid unless the notified competent authorities do not agree upon fulfilment of the conditions for the exemption within three months of the date of notification.
- From 18 June 2020, a financial counterparty will be solely responsible and legally liable for reporting on behalf of both counterparties, the details of OTC derivative contracts concluded with a non-financial counterparty not subject to the clearing obligation. To ensure the financial counterparty has the data it needs to fulfil its reporting obligation, the non-financial counterparty must provide the financial counterparty the details relating to the OTC derivative contracts concluded between them, which the financial counterparty cannot be reasonable expected to possess. If the non-financial counterparty wishes to continue to report these OTC derivative contracts, they may do so but they should inform the financial counterparty accordingly.
- From 18 June 2020, if a non-financial counterparty is not subject to the clearing obligation and concludes an OTC derivative contract with an entity established in a third country, that OTC derivative contract will not need to be reported by the non-financial counterparty, provided that: (i) the third-country entity would be qualified as a financial counterparty if it were established in the EU, (ii) the legal regime for reporting the third-country entity is subject to is declared equivalent under Article 13 of EMIR, and (iii) the third-country entity has reported the details of the OTC derivative contract pursuant to that third-country legal regime for reporting to a TR which is legally bound to provide access to the data to the entities referred to in Article 81(3) of EMIR.
- From 18 June 2020, if one or each of the counterparties in an OTC derivative is a UCITS or an AIF, the management company of the UCITS or the AIF manager (as applicable) will be responsible for the reporting on behalf of that UCITS or AIF. The authorised entity responsible for managing and acting on behalf of an IORP that does not have legal personality will also be responsible for reporting the details of OTC derivative contracts on behalf of that IORP.
Issuance of Legal Entity Identifiers
All EU counterparties entering into derivative trades need to have a Legal Entity Identifier (LEI) in order to meet the EMIR reporting obligations.
LEIs are issued by "Local Operating Units" (LOUs) on the Global LEI System.
The list of LOUs accredited by the Global LEI Foundation (GLEIF) can be found on the GLEIF website and includes the London Stock Exchange LEI Limited. Some of these LOUs serve a given country while others offer services to entities worldwide.
LEIs issued by pre-LOUs that have been endorsed by the ROC or accredited by the Global LEI Foundation can also be used for UK EMIR reporting.
Further information on how to obtain an LEI can be found on the LEI ROC website.