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EMIR

New EMIR Q+A published

ESMA have published an updated version to their Questions and Answers document on EMIR, which can be found here.

Among the interesting items for the energy and commodities trading industry:

  • It is reiterated that LEIs (or BICs) should be used (TR 10b)
  • It is restated that there is no officially endorsed way to generate UPIs or UTIs, but that the “E” method should be used for UTIs, and that for OTC trades a bilaterally agreed method should be used to chose who generates the UTI (TR 10e, TR 18, TR 19)
  • The UTI should be generated at the earliest possible opportunity, i.e. the venue if one exists, the CCP, or the confirmation system (in that order). If there is none, then the FC, NFC+ or seller, in that order (TR 19)
  • The Level 1 validations are re outlined in TR 20
  • Intra-day trades (i.e.those cancelled within the day) should be reported, but a “new” followed by a “cancel” (TR 38).

There are also some other new answers, for example one on what happens when a venue becomes an EU registered financial entity, and also about trades in the FX asset class.

The majority of these items are already being worked as the part of exercise of meeting the 1st December deadline for the Level 1 validations. However it remains to be seen if they will all be adopted in reality, especially when it comes to generating UTIs.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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