EMIR REFIT Preparation: FCA Go-Live Set & Divergence

A final piece of the REFIT puzzle was provided this past Friday as the FCA announced (link) a September 30th, 2024 go-live date for the UK’s version of the EMIR REFIT update to technical standards of reporting. Along with the final date, the FCA also published its draft of EMIR Validation Rules and Incoming/Outgoing XML schemas for submissions. Still in draft form, the FCA is allowing for comments until March 24th, 2023 with the final drafts expected to be released shortly thereafter.

Overall, as indicated by the FCA when issuing their initial REFIT Consultation Paper in 2022, the UK REFIT version is predominantly aligned with that of ESMA. Despite the similarities, the dual go-live dates and specifications do pose divergence challenges.


Preparing for ESMA/FCA Divergence

Managing old and new

With separate go-live dates of April 29th, 2024 under ESMA and September 30th, 2024 in the UK, firms with dual reporting obligations face the challenge of reporting two versions of EMIR submissions simultaneously. This differs from the current EMIR where other than the requirement that EU entities report to an EU trade repository and vice versa for UK firms, the submission formats and validations are the same. As a result, the go-live divergence effectively means ‘turning on’ the new format for only one part of a firm’s EMIR reporting flow.

Delegated reporting

Where the separate flows specifically come into play is with cross-jurisdiction delegated reporting. In cases where an EU entity is currently providing delegated reporting for their UK customers, continuing to provide delegation means reporting in the old format for clients while using the REFIT version for themselves.

The challenge may be greater for UK firms providing delegation for their EU customers. Instead of taking advantage of the longer September 30th time to go live afforded to UK entities, any delegation for EU firms will need to be aligned with the new submission format for the April 29th deadline. In addition, as part of the data gathering, firms will need to collect new counterparty related information relevant for their EU submissions for the April deadline (more on new counterparty data requirements).

Divergent fields and validations

While the UK REFIT technical standards and validations are closely aligned to that of ESMA, they aren’t a one-to-one match. Differences include the additional field of ‘Execution Agent’ which allows firms to tag 3rd parties submitting on their behalf. The FCA also amended a number validations and some changes in the XML Schema Definitions (XSD) that compose the ISO 20022 XML submission format used for reporting. In addition, a number of fields include permitted values that are slightly different to that of ESMA.

For the go-live, the EU and UK divergence can be viewed as minimal and manageable. Longer term though, expectations are that differences will continue to grow as each jurisdiction applies updates that are more relevant for their derivative monitoring needs.

Reporting with Cappitech

For assistance on any REFIT reporting needs and to learn more about how Cappitech’s platform is supporting the EU/UK divergence and other EMIR update challenges, Contact Us

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Ron Finberg
About the author: Ron Finberg
Ron is Executive Director, Product Specialist at S&P Global Market Intelligence Cappitech and helps customers with their compliance of EMIR, MIFIR, SFTR, MAS and ASIC derivative reporting. Ron is an ongoing contributor of regulatory focused content and webinars and leverages his over 20 years’ experience in the financial industry. He was also awarded the Editor’s Recognition Award for Best RegTech Vendor Professional in the RegTech Insight Europe Awards 2021.