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New ISO20022 XML format
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Firms will be required to submit their transaction reports to the trade repositories (TR) in the ISO20022 XML format. The feedback reports from the trade repository will also be in the same format. This will normalize the reporting formats across trade repositories which will allow for an increase in the supervisory effectiveness by the regulators.
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Point Nine has been submitting their EMIR transaction reports in XML format for a number of years now. All transaction reports submitted to the TR and the feedback status received from the TR is visible on the Trade Blotter on the Point Nine client portal.
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Reconciliations
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- Included in the RTS is the table with the list of reconcilable fields with the reconciliation tolerance and the reconciliation start date for each field. We note ESMA is increasing the number of reconcilable fields through a phased-in approach and is introducing the new Valuation Reconciliation Status to reflect the outcome of the reconciliation of the Mark to Market Valuations between the counterparties.
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Our clients can make use of the P9Recon tool or the Reconciliation Blotter on the Point Nine Portal. Here our clients have the transparency to the TR reconciliation status per UTI (paired / unpaired / matched / unmatched). Not only to the current status but also to the reconciliation history of the UTI. This makes direct access to the trade repository portal optional for our clients.
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Reportable Fields
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- The number of fields to be reported is increasing from 129 to 203.
There is a 18 month implementation period, the new RTS/ITS will apply from 29.04.2024
Firms will have 6 months grace period to update their outstanding derivatives to the new format.
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- We see The Entity Responsible for Reporting (This field represents the entity responsible and legally liable for reporting) Event Date field introduced in EMIR like it is under SFTR , Direction fields are replacing the Counterparty Side (buyer/seller field)
- Another interesting field is the Derivative based on crypto-assets field, which will allow counterparties to identify if the underlying is a crypto -asset.
- Point Nine is currently reviewing all changes to reportable fields, waiting on the TRs to provide UAT environments, collaborating with partners and clients to ensure compliance with the new format by go live date.
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UTI management
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As per Article 7 in the ITS, A derivative, reported either at transaction or position level, shall be identified using a ISO 23897 Unique Transaction Identifier (UTI) in field 1 in Table 2 of the Annex. The UTI shall be composed by the LEI of the entity which generated that UTI followed by a code containing up to 32 characters which is unique at the level of the generating entity
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Point Nine already has a full UTI solution in place on both trade and position level. Point Nine can be the UTI generating party for its clients and its counterparties using ESMA prescribed methods or ingest the UTI received from our clients counterparties. Post reporting, our clients are notified of their unpaired UTIs if any, through our Reconciliation Blotter on the Point Nine Portal and these are investigated and resolved.
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Instrument Reference Data
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As per Article 6 in the ITS, Firms will be required to populate the Unique Product Identifier (UPI) field in their OTC derivative transaction reports.
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- As mentioned in our previous slides Point Nine currently enriches and validates instrument reference data through multiple sources such as ESMA and FCA FIRDS, FIS, Bloomberg and also via ANNA DSB.
- The ANNA DSB has been designated as the sole service provider for the future UPI System performing the function of issuer of UPI codes as well as operator of the UPI reference data library.
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Reporting Significant Issues to NCA and Delegated Reporting
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- As per Article 9 in the ITS The entity responsible for reporting (ERR) shall notify its competent authority and, if different, the competent authority of the reporting counterparty of any of the following instances:
- any misreporting caused by flaws in the reporting
- any reporting obstacle preventing the report submitting entity from sending reports on time
- any significant issue resulting in reporting errors that would not cause rejection by a TR
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- ESMA expects the report submitting entities to inform the reporting counterparties and the entity responsible for reporting about relevant reporting and data quality issues for which the information will not be provided by the TRs.
- Point Nine’s automated email notification system and client portal with its Trade and Reconciliation Blotters provides this transparency to its clients and access to the portal can also be granted to our clients’ clients.
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