EMIR reporting requirements can be quite complex for treasuries not set up to handle them, requiring considerable legwork per trade. Fortunately, some modern treasury management systems (TMS) are now providing automation of significant portions of the EMIR process, enabling full EMIR compliance with only a couple of clicks.
Understanding the Complexities of EMIR
Reporting is likely the major change in EMIR for most organisations. Current requirements are that both parties must report trades to a repository, maintaining the same trade reference identifiers, not just the dealer. For Amerocentric treasuries, reporting of foreign exchange (FX) trades may be the greatest challenge; as trade reference identifiers in the US are often synchronised in-house, instead of through a centralised system, resulting in infrastructural differences that make keeping a common trade reference identifier difficult. As each party must report the same trade reference identifier, companies may be required to modify their workflows in order to maintain matching.
Regulatory reporting must be submitted through one of six trade repositories authorised by ESMA as of 28 November 2013. These are:
- DTCC Derivatives Repository LTD
- Krajowy Depozyt Papierów Wartosciowych S.A. (KDPW)
- REGIS-TR S.A.
- UnaVista Limited
- CME Trade Repository Ltd.
- ICE Trade Vault Europe Ltd. (though only for commodities, credit, equities, and interest rates)
Treasury management systems – or rather, their vendors – may process reports to these trade repository as a third party. This simplifies the process of manually uploading and verifying each file, and is likely the means that the ESMA intends you to use.
Reporting in a Couple of Clicks
If you’re already using a TMS platform, you likely have the required EMIR data already available within it. This simplifies the reporting process quite a bit. If your system is set up for EMIR transactions, then creating the report can be as simple as a couple clicks.
Let’s take an example. Let’s say you are the fictional TWAG, a German corporate group, and your subsidiary CzAir, wants to buy options on 333,333,333 Czech koruna (CZK) worth of euros (EUR) for a potential future fleet purchase of theirs. You make this trade within your TMS, and now it’s time to report it to EMIR.
From your TMS, simply open your EMIR reporting function, should be built in to any modern treasury system.
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