EMIR REFIT RTS Final Report Reveals Changes in Store for the Regulation

Preparing For EMIR REFIT – New Counterparty Fields

At S&P Global’s Global Regulatory Reporting Solutions (GRRS) division, one of the areas of top questions we receive is about the upcoming changes to EMIR under the new technical standards for EMIR REFIT. Questions cover when it will go live, details about new fields and information on the ISO 20022 XML submission format. While we don’t yet have a final date for the go-live (indications are sometime in early 2024), preparation is taking place.

To help educate with the changes, our GRRS team is launching a preparation blog where each month we will focus on a different area of the REFIT that firms should keep in mind with their preparations. For today’s initial post, we focus on the new counterparty fields that will be required with the update. Upcoming posts will cover other aspects of reporting such as lifecycle events, the new format for indicating direction of trades and asset class specific new fields. While the final details of the update are are yet to be published, from ESMA’s last consultation paper released in June 2021, we currently have a strong framework of what will be expected (link to consultation paper).

Borrowing from SFTR

A lot of the new fields coming to EMIR build on those that were introduced for SFTR. Counterparty details are one of the areas that this is clearly seen.

Entity Responsible to the trade (field 3) : Similar to SFTR, firms will be required to add information of who is the firm responsible for making the report. This will cover cases where a financial counterparty has an obligation to report for a small non-financial counterparty (NFC-) as per EMIR REFIT rules that went into effect in June 2020. In addition, Fund Managers are the responsible entity when reporting transactions of their underlying funds as per Article 9(1b) to (1d) EMIR.

The technical standards add more granularity about the non-reporting counterparty with these fields:

  • Counterparty 2 Identifier type (field 8) : Simple True/False field if LEI is used
  • Nature of counterparty 2 (field 11) – New field to describe the non-reporting party with acceptable values of NFC/FC/Other
  • Corporate sector of counterparty 2 (field 12) – The sector description that exists for reporting entities is expanded to the non-reporting counterparty
  • Clearing threshold of counterparty 2 (field 13) – True/False field if firm is above the clearing threshold
  • Reporting obligation of counterparty 2 (field 14) – True/False field if the other counterparty has their own EMIR reporting obligation

For anyone already reporting under EMIR, these individual fields are familiar as other than ‘Entity Responsible to the trade’, they all exist now for the reporting counterparty. The difficulty though is preparing a process to collect these details from current customers as well as including the information in data collection from new clients. Having in mind now that a plan should be put in place, will make it easier to comply with the update values when they are required in the future.

Read all our EMIR Preparing Post:

Ron Finberg
About the author: Ron Finberg
Ron is a Director at S&P Global Market Intelligence, Global Regulatory Reporting Solutions 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.