The latest EMIRate newsletter from Treamo Business Consulting summarises the latest progress on EMIR reporting. Sadly they believe that ESMA are “again making sure that 2015 is and remains eventful”.

ESMA – Level 2 validations in development

Treamo report that “ESMA has now also noticed that the original field definitions and specifications Level 1 were in part insufficient. The Level 2 validations are currently being discussed between ESMA and the trade repositories (in camera) and there has still been no final decision or schedule.

ESMA – revision of the reporting standards

Treamo report that, “A consultation paper is currently making the rounds which proposes several new fields as well as additions in terms of the information to be reported.” If you are interested in more details, see: http://www.esma.europa.eu/

Treamo believe that, “Regardless of the outcomes of the consultation phase, which closes in the middle of February, market participants can certainly expect some changes which will again mostly necessitate some corresponding modifications in the area of IT-systems. We have, however, already identified several issues where, from our point of view, the necessary degree of clarity and also consistency are still lacking and therefore we cannot exclude the possibility of there being more amendments (and associated modifications).”

EMIR-reporting, reconciliation – a farce?

Treamo are angry about the current mess. They have found that:

• those market participants who also directly report their derivatives concluded with external partners, the majority of transactions are either not reconciled or are reconciled with errors. (The reason for this is that ESMA missed the opportunity to issue clear guidelines for reporting the various instruments. )
• some banks are not even complying with the relatively simple requirements of the Level 1 validations
• although the trade repositories announced that they would reject Level 1-non-conform trade reports with effect from December 1, 2014, that was as far as it went. They continue to see trade reports from banks which do not comply with these requirements.

Treamo finish with this comment, “As long as there are no clear and understandable rules in this area which are complied with by all market participants, the legally required reconciliation of trades will remain a farce.”

EMIRate news

EMIRate now has 80 clients who use 15 different treasury management systems and have processed over 300,000 reported trades involving practically every asset class.