The 11 August launch of the requirements to report the valuation of derivatives trades and of posted collateral appears to have gone more smoothly than did the launch of trade reporting back in February, industry experts said.
Under EMIR, the European market infrastructure regulation, the value of trades and collateral now have to be reported in addition to the 85 other data fields that became mandatory six months ago. Banks, counterparties and the recently-established trade repositories (TRs) have all been struggling with the new requirements, with some estimates putting the percentage of matched bargains as low as 3% where different TRs are used by each side of the trade.
TheTradeNews.com says that there has been “a surprising amount of efficient reporting in the first few days under the new rules”.
“I would say we are in a much more comfortable position than in February.”
Regulator ESMA, the European Securities and Markets Authority, had issued a Q&A which TheTradeNews.com described as “a vague guidance for the additional requirements”, adding: “Participants have voiced concerns in the past that these Q&As represent guidance rather than formal instructions, meaning some parts of the reporting process are still open to interpretation.”
Chris Collins, director at Sapient Global Markets, said, “With the uncertainty around the valuation models used, the proof remains in the pudding as to whether the quality and content of those reports will meet the standards expected by the regulator.”
TheTradeNews.com's article can be read by clicking here.