Regulatory Reporting

Despite the fact, that reporting has always been around in various forms and differing characteristics, the “post-crisis” (2007-2008) regulations require data in a way and extent which gives a new dimension to the meaning of the term “regulatory reporting”. Reports must be granular and detailed, standardised, precise, timely (almost real-time in some cases) and available for post-reporting checks and re-conciliation. There are numerous data elements which must be reported under the different regulations EMIR, FinMIA/FinFraG, MiFID II/MiFIR and SFTR.

 

Report

EMIR

Reporting regime for risk reduction in derivatives market.

The most important aim of the European Markets Infrastructure Regulation (EMIR) is to increase the transparency of the EU-derivatives market and to reduce the counterparty risk and operational risk for the market participants. EMIR has been in force since 16 August 2012, but the reporting started in February 2014, followed by several amendments. EMIR establishes the obligation on both counterparties to report the details of the derivative trades to one of the trade repositories. The obligation covers all types of entities except private individuals.

The minimum amount of information required to be reported is separated into two main categories: 1) Counterparty data and 2) Common data

 

MiFID/ MiFIR

Reporting regime for market integrity and transparency purposes.

The EU-Directive 2014/65/EU (“MiFID II”) has been in force since January 3 2018 and comes in a package with the Markets in Financial Instruments Regulation – “MiFIR”. Together they aim to deliver better protection for investors and more transparency into all asset classes across the EU, applying to almost every market participant. The MiFID II/ MiFIR requirements enforce reporting to the National Competent Authorities and/or ESMA and introduced two types of dedicated entities for data transmission – Approved Reporting Mechanism (“ARM”) and Approved Publication Arrangement (“APA”). These entities process the data for the pre-trade transparency (basic trade data of firm’s quotes) and the post-trade transparency (basic trade data of executed trades).  Furthermore, the position reporting and position-limit regime is introduced for transaction commodity derivatives.

 

 

 

SFTR

Reporting regime for enhancing the transparency of securities financing markets and of the financial system.

The Securities Financing Transactions Regulation (EU) 2015/2365 (SFTR) was published in January 2016, but the reporting obligations will start in the second quarter of 2020.

The SFTR responds to the necessity to improve the transparency of securities financing markets as part of the financial system and creates a unified framework under which the details of Securities Financing Transactions (SFTs) must be efficiently reported to trade repositories.

The counterparties to a SFT are obliged to report their transactions to a trade repository registered by ESMA. The transactions in the scope of SFTR are repo/reverse repo deals, buy/sell & sell/buy-back transactions, securities (and commodities) lending & borrowing and margin lending.

The SFT Reporting involves 153 data fields covering the counterparty data, the loan and collateral data, margin data and re-use, cash reinvestment and funding sources data.

By defining the format of the reports for the first time, ESMA aims to standardise the SFTR reporting process. In this case, reports should be harmonised and compliant with the ISO 20022 standard.

 

FinMIA/ FinfraG

Regime for the organisation and operations of financial markets and reporting from the market participants in securities and derivatives trading.

The Financial Market Infrastructure Act (FinMIA) – known also under its German title as the Finanzmarktinfrastrukturgesetz (FinfraG) – entered into force on 1 January 2016. FinMIA/ FinfraG is the Swiss legislation for the regulation of financial markets, equivalent to the regulatory packages in the European Union, such as EMIR and MiFID II/MiFIR.

Complying with such vast requirements will be swifter and more efficient with a partner who is experienced in regulatory reporting projects and capable of covering the full implementation chain from compliance assessment, impact analysis, pre-study to implementation, like targit GmbH and our regulatory reporting suite – tecconTR, which has been in use since 2013 and is constantly evolving to ensure compliance with the expansion of the regulatory requirements.