The Malta Financial Services Authority (“MFSA”) has recently issued a circular, dated November 10, 2023, addressing market participants on the Guidelines for Reporting under Regulation (EU) No 648/2012, known as the European Market Infrastructure Regulation (“EMIR”).
The circular is directed towards entities engaging in derivative contracts, particularly financial counterparties (“FC”) and non-financial counterparties (“NFC”) as defined under EMIR.
Overview and Purpose
The MFSA informs market participants about the release of Guidelines by the European Securities and Markets Authority (“ESMA“) on October 23, 2023. These guidelines are set to be effective from April 29, 2024, focusing on the derivatives reporting obligation under Article 9 of EMIR, and the responsibilities for Trade Repositories (“TR“) under Articles 78 and 81.
The Guidelines aim to harmonize and standardize EMIR reporting requirements, crucial for ensuring high-quality data necessary for effective systemic risk monitoring. This move towards increased harmonization is expected to contain costs throughout the reporting chain.
The Guidelines provide clarifications on the following aspects:
- Transition to reporting under the new rules: Details on adapting to the new regulatory framework.
- The number of reportable derivatives: Clear insights into the reporting scope.
- Intragroup derivatives exemption from reporting: Understanding exemptions within group structures.
- Delegation of reporting and allocation of responsibility: Guidance on assigning reporting responsibilities, outsourcing and third party reliance.
- Reporting logic and the population of reporting fields: Insights into the technicalities of reporting.
- Reporting of different types of derivatives: Understanding the diverse range of derivatives covered.
- Ensuring data quality by counterparties and TRs: Measures to maintain the integrity of reported data.
- Construction of the Trade State Report and reconciliation of derivatives: Details on report construction and reconciliation procedures.
- Data access: Guidelines on accessing the reported data.
For more information on EMIR, and its regulatory implications, feel free to contact us.