We have previously explained how the reporting obligation included in the EMIR affects all counterparties to all derivative transactions, as it includes both financial and non-financial counterparties, it covers all derivative contracts, without exemptions for “non-EEA derivatives” and does not have a threshold below which contracts should not be reported.
The timetable for reporting the details of derivative contracts to Trade Repositories, which will then compile all the data they receive from the different sources and make them available to all the relevant regulating bodies, includes several milestones. The first is 12th February 2014, which marks the 90 calendar days after the first official registration decision for Trade Repositories by ESMA.
Moreover, starting from February 12th 2014, EMIR stipulates for a 180 day transitional period within which the exposures information should be reported. In addition, any derivatives that were outstanding on 16th August 2012 and still remain outstanding on February 12th 2014, should be reported within the 90 days after February 12th, while those entered into before 16 August 2012 and are still outstanding, or after 16 August 2012 but not outstanding on February 12th 2014, must be reposted to a Trade Repository within the next three years.
CySEC, as one of the major regulators in the forex and binary options industries has recently addressed two circulars to the CIFs under its supervision, informing them and clarifying certain aspects of the upcoming EMIR obligations. With particular reference to the reporting obligation, the deadline for which is the most looming, CySEC points out in its circular dated 22nd January 2014 and entitled EMIR – European Regulation (EU) No 648/2012 on Over the Counter Derivatives, Central Counterparties and Trade Repositories – Latest Developments that: “all Regulated Entities are required to start reporting directly to ESMA registered TRs, as from February 12, 2014, all derivative contracts they have concluded as well as any modification or termination of these contracts.”
Moreover, CySEC highlights that “as from August 16, 2012, Regulated Entities are required to keep a record of any derivative contract they have concluded and any subsequent modification for at least 5 years following termination of the contract.”
In addition, CySEC asks all of the firms under its supervision to fill in a relevant questionnaire by 31st January 2014 in order to be able to verify the extent to which these entities have implemented the EMIR requirements.
In a further circular on the same subject sent out on 23rd January, CySEC clarifies that “according to article 9 (Reporting Obligation) of the European Regulation (EU) No 648/2012 on Over the Counter Derivatives, Central Counterparties and Trade Repositories, the Cyprus Investment Firms and UCITS Management Companies may report directly to Trade Repositories or delegate the reporting.”
As it seems that regulators are serious about ensuring that all counterparties in their jurisdiction will fully comply with the EMIR reporting obligation, all those brokers who have not yet made such arrangements should act swiftly as the clock is ticking. For reliable information and assistance on how to fulfill the reporting obligation you can always refer to the handbook prepared by leading financial services consultant MAP S.Platis in order to introduce their independent reporting service MAP S.Platis introduces MAP-ERS.