EMIR REFIT

The European Market Infrastructure Regulation (EMIR) underwent significant updates through the EMIR Refit, which aimed at enhancing the regulatory framework for over-the-counter (OTC) derivatives in the European Union. The changes were officially implemented in April 2024. The primary goal of EMIR Refit is to reduce the reporting burden on smaller counterparties while improving the quality and accuracy of reported data.

Reporting Requirements

Under EMIR Refit, the reporting framework has been updated to include additional fields, such as Unique Product Identifiers (UPIs) and identifiers for crypto-related assets, increasing the number of reportable fields from 129 to 203.

Unique Trade Identifiers (UTI): The responsibility for generating UTIs has shifted to a more structured approach, with a new waterfall methodology determining which counterparty is responsible for UTI generation, thereby improving clarity and reducing errors in reporting

Unique Product Identifier (UPI): The introduction of UPIs is a significant change under EMIR Refit. Reporting parties must now utilize UPIs issued by a centralized operator, ensuring consistent identification of derivative products across the market. This requirement is part of a broader effort to standardize reporting practices and enhance data quality.

Matching and Reconciliation

EMIR Refit mandates that trade repositories perform double-sided matching of reported data, which includes new valuation-related fields. This reconciliation process is designed to ensure that both parties to a trade report the same information, thereby enhancing data integrity and reducing discrepancies.

Event Type Field: A new “Event Type” field has been introduced to provide greater transparency regarding the lifecycle of trades, allowing for better tracking and management of derivatives transactions

Transition to ISO 20022 XML

A major technical change is the requirement to adopt the ISO 20022 XML standard for all EMIR-related reporting.

Finmatek Ltd can assist you in navigating the complexities of EMIR Refit by utilizing its regulatory expertise and offering comprehensive implementation support.