EUROPE: ESMA Clarifies Reporting of On-Exchange Derivatives under EMIR

Monday December 23 2013

ESMA have clarified reporting of on-exchange derivatives under EMIR The European Securities and Markets Authority (ESMA) has issued updated Question & Answers (Q&As) on the implementation of the European Markets Infrastructure Regulation (EMIR). These updated Q&As clarify, for example, how exchange-traded derivatives (ETDs) should be reported to trade repositories (TRs). From 12 February 2014, EMIR requires all EU counterparties to a derivative contract to report their trades to a TR, irrespective of whether these are traded on or off exchange. Reporting derivative contracts enables regulators to identify and analyse potential risks associated with derivative markets.

ESMA’s Q&As aim to provide guidance to market participants, clarify which firms have to report their ETD contracts to TRs and what information needs to be included in order to ensure consistent data across the EU.

Derivatives traded on EU trading venues are covered by reporting rules under both EMIR and the Markets in Financial Instruments Directive (MiFID). MiFID covers the actual trading of derivatives, whereas EMIR is about post-trading arrangements. ESMA’s Q&As are aimed at clarifying counterparties’ reporting requirements and at fostering consistency by avoiding reporting conflicts between the two regimes.

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