EMIR Refit 2024: Navigate the Changes with Ease

As the September 30th, 2024 deadline for the European Market Infrastructure Regulation (EMIR) Refit approaches in UK, companies reporting over-the-counter derivatives (OTCs) in Europe are preparing for significant regulatory changes. When the EMIR Refit was first implemented in April 2024, in Europe it enhanced reporting requirements to improve transparency and reduce systemic risk. In this blog, we will explore the key changes in the EMIR Refit and discuss how automation can help your organization adapt to these new regulations more easily.

Major Changes in the EMIR Refit

Changes in the EMIR Refit that will go into effect on September 30, 2024 include:

• ISO 20022 XML Reporting: One of the most significant changes under the EMIR Refit is adopting ISO 20022 harmonized XML submissions for EMIR reporting. This standardized format is designed to eliminate discrepancies in data, ensuring more accurate and consistent reporting across the board.
• Unique Product Identifier (UPI). OTCs admitted to trading in a venue will be required to use an ISIN code, while other derivatives should be identified with a UPI code from the Derivatives Service Bureau (DSB) Ltd. The UPI will play a crucial role in transaction reporting, enabling authorities to aggregate data, assess systemic risk, and detect market abuse more effectively.
• Unique Transaction Identifier (UTI). The EMIR Refit adopts CPMI-IOSCO standards for defining the logic structure of UTIs. Both the UTI generation waterfall model and the deadline for communicating UTIs to counterparties have been revised to enhance clarity and accuracy in reporting.
• Legal Entity Identifier (LEI). Under the new regulations, LEI renewals will only be relevant for the reporting counterparty and the entity responsible for reporting. This change simplifies the LEI management process and reduces administrative burdens.
• Revised Reporting Lifecycle Events. ESMA has introduced new Event Types (including NEW, MODIFY, CORRECT, TERMINATE, ERROR, and REVIVE) to offer more granularity about the event that triggers a given report. The new Event Types, along with the existing Action Types, will provide more detailed insights into the reporting lifecycle.
• Reportable Fields. The EMIR Refit introduces 89 fields, bringing the total to 203. Notably, the Derivative Based on Crypto-assets field allows counterparties to indicate whether a security is based on a crypto-asset, providing crucial insights for assessing trading volumes and risk.

Automate Reporting with the EMIR Refit Module

The EMIR Refit module, which is part of the IVP Regulatory Reporting Solution, automates and optimizes compliance with EMIR Refit guidelines. Key features include:

• Seamless coordination: End-to-end integration with the OMS, accounting systems, data warehouses, and trade repositories allows easier data management.
• Automatic updates: Real-time updates of ACKs and NACKs occur automatically along with notifications that help monitor clearing thresholds.
• Error validation: The module identifies trade repository and regulator errors using ESMA codes.
• Reference library: The built-in reference library maintains LEI codes, PII information, and counterparty details.
• Analytical dashboard: The dashboard provides jurisdiction-specific position and trade status.
• Comprehensive submission handling: The module manages submission output for various trade repositories.

Simplify EMIR Refit Compliance with IVP Managed Services

Combining IVP Managed Services with the IVP Regulatory Reporting Solution can significantly reduce the time and effort required for EMIR Refit reporting. Our team of experts handles everything from data sourcing and trade correction to final report submission. Additionally, our business and compliance analysts work directly with regulators to resolve any discrepancies in reporting interpretations, ensuring smooth and accurate compliance.

To learn more about how to navigate these changes and optimize your EMIR compliance strategy, watch our latest webinar: Master the EMIR Refit Changes: Streamlining Compliance with Automation. In it, our experts provide an in-depth overview of the new regulations and demonstrate how the IVP Regulatory Reporting Solution can streamline your compliance efforts.