emir transaction reporting alert 9 january 2014

8/13/2019 EMIR Transaction Reporting Alert 9 January 2014

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EMIR: Transaction

Reporting per 12February 2014

Over-The-Counter Derivatives AND

Exchange Traded Derivatives

ALERT

Roger Coenen MSc. CFA

09 January 2014

Version 1.0

1

This document has been composed with the greatest care and attention. Statements, views and opinions

expressed in this document are those of the author and do not necessarily reflect those of Mylette Group. While

every care has been taken in the compilation of this information and every attempt made to present up-to-date

and accurate information, we cannot guarantee that inaccuracies will not occur. This document does not contain

any legal, investment or other advice. No responsibility is accepted for any action taken by any third party in

relation to the underlying document or any inconvenience, damage or loss caused as a result of any informationwithin these pages.



Pagina | 1

Transaction reporting under EMIRWith transaction reporting only 34 days away the clock ticks louder and louder for parties tradingderivatives.

Remember: transaction reporting under EMIR concerns the reporting of Over-The-Counter (OTC)

derivatives AND Exchange-Traded (ET) derivatives.

Further main characteristics:

Reporting start date: 12th

February 2014Entities under scope: Financial Counterparties, Non-Financial Counterparties (above and

below the clearing threshold) and Central Counterparties (CCPs)Reporting what? all OTC and ET derivative contracts entered into as of 12 February

2014, and also all changes and terminations of contracts as of that date

Reporting to? A registered Trade Repository (TR), authorized by ESMA (see Table 2)Backloading of trades See detailed explanation below in the separate paragraph

Other aspects:

•

No obligation to report to the same TR as your counterparty to the trade• Obligation to have upfront consent on which Counterparty reports

• Reporting can be performed by a third party or by the CCP

• There can be no duplication of reporting

• However, each counterparty remains responsible for reporting in a timely (T+1) and

accurately manner (so even in case of outsourcing the reporting obligation!)

BackloadingOn reporting start date the following applies:

Those derivative contracts which were outstanding on 16 August 2012 and are stilloutstanding on the reporting start date shall be reported to a trade repository within

90 days of the reporting start date for a particular derivative class (so, ultimately 12

May 2014); Those derivative contracts which:

(a) were entered into before 16 August 2012 and are still outstanding on 16August 2012: or

(b) were entered into on or after 16 August 2012,and that are not outstanding on or after the reporting start date shall be reported to atrade repository within 3 years of the reporting start date for a particular derivative

class (so, ultimately 12 February 2017).

Alert Be aware: no delay in reporting has been foreseen for trades that were entered into after 16

August 2012 and which are still outstanding on reporting start date, 12 February 2014! These

trades have to be reported immediately as per 12 February 2014! Almost the whole industrymissed this, even an active regulator like the Financial Conduct Authority in the U.K. It was

generally interpreted that for these trades the 90 days delay also was applicable. This is not thecase however!

Also, non-compliance is not an option. The penalty regime for The Netherlands is severeSee table 1 for an overview.

Table 1: Overview of penalty regime for EMIR in The NetherlandsArticle Part Description Category Base penalty Minimum Maximum

4 1, 3 Clearing obligation 3 2.000.000,00€ 1.000.000,00€ 4.000.000,00€

9 1, 3 Reporting obligation 2 500.000,00€ 250.000,00€ 1.000.000,00€

9 2 Record keeping 1 10.000,00€ n.a. n.a.

11 1, 4

Risk mitigation:

- timely confirmation

- portfolio reconciliation 3 2.000.000,00€ 1.000.000,00€ 4.000.000,00€

11 2, 3

Risk mitigation:

- daily valuation- collateral exchange 2 500.000,00€ 250.000,00€ 1.000.000,00€

emir transaction reporting alert 9 january 2014

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