Corporate plans for EMIR reporting compliance
by Kylene Casanova
Stephen Calver, Group Treasury Manager at Spectris plc wanted to know what other corporates were doing about EMIR reporting compliance, so he posted Spectris’s plan on LinkedIn to encourage others to respond.
He wrote: ‘Our plan is:
1) We are looking to register our 13 subsidiaries with their own LEI (Legal Entity Identifier)
2) Investigate into choice of Trade Repository (TR)
3) Continue dialogue with our banks to see if they offer delegate reporting. (most banks don't currently offer the service but have intentions to do so).
4) Talk to other corporates and decide which TR
5) Work out how we will generate UTI for our internal trades- will we be able to use our TMS reference? (We know that all external trades executed on 360T have a UTI [Unique Trade Identifiers])
5) Test files from TMS to TR
6) Go-live on 12 Feb 2014
7) Aim to back load before end of 2014.
The conversation that followed was an important glimpse into the state of play in banks, suppliers and corporates:
- one corporate, who also has a mix of positions from their banks on trade reporting, has concluded that ‘I am inclined to go down the route of self-reporting all of our trades.’ As ‘We will be having to report the internal trades that sit behind most of the trades we execute with our bank group in any case.’
- BELLIN’s CEO Martin BELLIN plugged their TMS solution that can report direct into one TR (Regis TR), and said that banks will not care about inter-company deals and the UTI question is still open, since the banks have not confirmed that all of them will use the deal number defined by 360T for their internal systems.
- Peter Matza, at the UK’s ACT, commented: ‘Don't forget that delegating isn't failsafe - if the bank or whomever makes a ricket, you are still liable. Plus, I'd also recommend being wary about your data security.’
- There is still confusion over what the implications are going to be if companies do not comply. And Stephen added, ‘We don't know how it is going to be audited.’
- BELLIN responded, ‘It is the company’s sole responsibility to make the data available to the repositories on a daily scale. This is important to understand in the first instance. In the second instance it is to be considered that every company has to make sure that there is no deal missing in the reporting – doesn’t matter if it is concluded with group companies or banks. In case the company closes derivatives with different banks (especially from outside of Europe) and wants to delegate the reporting obligation the treasury has to make sure that every involved bank is taking care of the reporting. Most likely there are at least some exceptions in terms of delegation offering. This again requires the company to register with a repository directly and to report the deals concluded with these exceptions. This means at least there are no savings at all to delegate the reporting. It just makes processes less transparent for the auditor. Aside optimised processes, they will check on the completeness off the reporting obligations, which has to be proven by the corporate doesn’t matter the optional delegation. It seems that for most of the corporates with professional treasury processes, delegation to banks will not make any sense and will not add any value to their business.’
EMIR in many parts is still unclear, however, what is clear is that: 1) the point Martin makes about not needing the banks, if Corporate Treasury Department has a decent TMS and service suppliers is fundamental to what is going to happen, 2) corporate treasury departments will need service suppliers who really understand the EMIR regulations, so can advise on corporates can and cannot do, and 3) UK’s ACT is doing a useful job in pressurising the regulators for clarity and briefing everyone. (See www.treasurers.org/emircountdown)
Like this item? Get our Weekly Update newsletter. Subscribe today