EMIR REFIT

The Regulatory Technical Standards for Regulation (EU) No. 648/2012 (EMIR REFIT) have been published in the Official Journal of the European Union on the 7th of October 2022 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2022:262:TOC.
The published regulations enter into force on the 27th of October 2022.
Taking into account the 18-month implementation period, the new regulations apply from 29th of April 2024.

 

THE KEY CHANGES resulting from the implementation of EMIR REFIT are summarized below:

• reporting and feedback messages exchanged between the participant and KDPW_TR will have to comply with the ISO 20022 XML standard;
• requirement to define an appropriate relationship between RSE and ERR/CP1 in the RT EMIR system databases;
  
  In accordance with the requirements of EMIR Regulation (Article 9 and Article 79(9), Regulation 150/2013 (Article 19), and Regulation 2022/1858 (Article 1(1)(c), the submission of a report on behalf of another counterparty, i.e. when the RSE is not also an ERR or CP1 (in case the ERR field is not filled in), requires the prior definition of an appropriate relationship between the RSE and the ERR/CP1 in the databases of the EMIR TR system. The relationship is established by the RSE acting as a reporting participant, via a dedicated XML message - auth.rlt.002.XX. Correct transmission of the message and acceptance of ERR/CP1 shall be the equal to confirmation by the participant (RSE) that it has the authorization granted by the counterparty to report on its behalf. The final confirmation of the establishment of the relationship is the return message auth.031.001.XX with the acceptance information auth.rlt.002.XX.
  In order to fulfill the above obligations, in accordance with the arrangements with ESMA, the reporting authorization verification procedure designed by the trade repository requires obtaining the counterparty's email address. Obtaining the above data is necessary for the proper implementation of the obligation to verify proper authorization to report on behalf of the counterparty.
  KDPW will process the acquired data in accordance with applicable regulations, service regulation and internal procedures and will ensure proper protection.
• the new Regulatory Technical Standards include a total of 203 fields, not all of which will be required for every message submitted;
• lifecycle events reporting will be possible by using new fields: Event Type and Event Date;
• reviving an erroneously cancelled or closed transaction will be possible using a new action type "Revive" (AT=REVI);
• new separate action types "Margin update" (AT=MARU) and "Correct" (AT=CORR) will be used for margin reporting and its correction;
• new rules for creating UTIs will be introduced;
• a new field UPI (unique product identifier) will be introduced;
• by 6:00 UTC of the next business day, the participant will receive 7 End of Day reports, covering:
  • Trade Activity Report – all action types reported and accepted during a given day
  • Trade State Report – the latest trade states of the outstanding derivatives
  • Rejection report – a list of reports that have been rejected during that day
  • Reconciliation report – the reconciliation status of all reported derivatives subject to reconciliation
  • Missing valuation report – all outstanding trades or positions for which no valuation has been submitted within the last 14 days
  • Missing margin report – all outstanding trades or positions for which no margin information has been provided within the last 14 days
  • Abnormal values report – all trades or positions reported using the action type "New" (AT=NEWT), "Position component" (AT=POSC), "Modification" (AT=MODI) or "Correction" (AT=CORR), received on the day for which the report is created and whose notional amount is abnormal for that class of derivatives.
• the report submitting entity (RSE) will receive a report on the reconciliation process including information on the fields that have not been reconciled, detailing the status of all derivatives subject to reconciliation that day, no later than 60 minutes after the conclusion of the process;
• alignment to the reconciliation process with the new RTS and ITS will be divided into two stages:
  • STAGE 1 covers 87 fields and begins with the go-live date of the regulation
  • STAGE 2 includes 61 fields and begins 2 years after the go-live date (eg. the reconciliation of valuation amount field)
• Grace period - trades and positions that will not be cleared by the EMIR REFIT go-live date (i.e., by 29.04.2024) will have to be updated to the revised RTS within 180 days
• guidelines for LEI changes (EMIR Q&A TR 40) and transfer of data between Trade Repositories will be moved to the RTS level.

DOCUMENTATION:

* ISO20022 message schemas are published on ESMA's website and on MyStandards.
Access to MyStandards is free of charge and does not require a SWIFT licence. Only prior registration on the platform is required.