Market participants clearly cannot delegate responsibility for the new obligations that came into effect on 12 February under the European market infrastructure regulation, but they can delegate the function. However, buy-side players have been slow to take up that initiative.
TheTradeNews.com quoted Mark Husler, CEO of one of the six new trade repositories, UnaVista: “There are some organisations that do like to control reporting in-house. They feel it reduces their regulatory risk and I think that’s a growing trend.” The sell-side, he said, has been "very active in exploring ways of using technology for delegating reporting.”
It appears as though brokers left it too late when, at the end of last year, they started to offer to handle EMIR reporting requirements for buy-side firms. “Had that come through in August or September, I think far more investment managers would have delegated,” said David Broadway, senior technical advisor at the Investment Management Association.
Broadway added that one of the advantages for buy-side firms outsourcing to their broker is that it removes the problem of each side of a trade putting different information into the 85 data entry boxes involved in EMIR reporting. However, he added that it is important that buy-side firms have a process in place to oversee what is being reported on their behalf.
TheTradeNews.com’s report is available by clicking here.