The UK regulator’s recent review of firms’ ability to comply with the derivatives trading reporting rules found that “the vast majority of derivatives contracts are being reported.”
The Financial Conduct Authority’s second ‘implementation review’ of reporting under EMIR, the European markets and infrastructure regulation, said, however, that there were “some issues with the quality of some of the reports” as well as “some areas where there are continuing uncertainties about reporting”.
- Most of the firms that were not able to start reporting on the 12 February launch date because of ‘onboarding’ issues relating to their chosen trade repository have now caught up.
- In backloading, firms had difficulties assigning relevant identifiers to old trades.
- The majority of reporting has been “correct and successful” but some have still to make changes to their systems arising from the Q&As issued by regulator ESMA, the European Securities and Markets Authority, the day before trade reporting commenced.
- Data quality issues relate to incomplete details of the product traded, for example not identifying the underlying equity for an equity derivative; using a proprietary code instead of a legal entity identifier (LEI) for a counterparty; or not specifying the execution time of a trade.