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EMIR

EMIR Update: TR Fees and EMIR Review legislative proposal

Last week ESMA published this thematic report, which covers fees charged by EMIR Trade Repositories, starting on page 23. The report expresses concerns regarding several aspects of the fees, such as comparability between TRs, and how easy it is to understand the likely fee level given a particular scenario. It also compares volumes between many of the TRs. The report provides guidelines as to how fees should be calculated and communicated in future.

The implementation of the EMIR Review took another step towards the end of last year, with the publication of an updated legislative proposal for the change from the European Commission, which can be found here. This follows many previous discussions and comments (see here). There are several items of interest to those in energy and commodities including:

  • The remaining backloading deadline, for trades which were executed or were outstanding on or after 16 August 2012, but which had matured before 12th February 2014, is removed.
  • Trades between internal counterparties not to be reportable if both parties are non financial.
  • If an “NFC-” trades with an EU based FC, the FC is liable to report both sides of the trade, unless the NFC decides to report it anyway. the NFC- is obligated to provide data to the FC so that they may make the report (including for example the hedge status).
  • Changes to the calculation of the clearing threshold so that it is calculated annually based on data from March, April and May, subject to certain conditions.

Some of these represent subtle changes from the previous proposals.

The new rules are to apply in stages, some 6 months and 20 days after publication in the Official Journal, some after 12 months and 20 days and some after 18 months and 20 days.

 

 

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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