A week after the Go Live for EMIR Reporting of Trades, and a few interesting observations can be made about how trade reporting is going under EMIR, following the uncertainty of last week.
As we observed straight after the go live, there were no complete disasters, although there were one or two “glitches”. In operational terms, reporting seems to be continuing, and some of those who didn’t make it are catching up.
The issue of on boarding or participants has still not gone away completely. And the number of reported LEI registrations is increasing rapidly.
As predicted, the reconciliation of trades is beginning to shake out some of the uncertainty about what goes in each field. TRs are finding only a very small percentage of matches so far, particularly in commodities. And yet there is still no concrete guidance on what goes where. The commodity trading community needs resolution as soon as possible. Let’s hope this happens.
And then there is the Q+A that was released by ESMA only hours before the reporting deadline. The energy market is beginning to absorb this, and in particular two points:
- UTI formats – ESMA proposed a new UTI format. Those generating UTIs are beginning to look at this. The question is if and when the format will be mandatory.
- Agreement of taxonomy – There is also a requirement for counterparties to agree how the will report products with the “E” taxonomy. Many are waiting to see if the trades reconcile, but expect this to generate a great deal of work.
There are many other issues covered in the Q+A that also need to be addressed.
And also there are exchange traded derivatives. These have been required but many either have not yet reported them, or are just sending anything they can. More questions will be asked about this over the next few weeks.
So, after a week, the feeling is that we have passed a mile stone, but that there is still a “to-do” list, which is significant. Better to address it before REMIT, Clearing and MIFID II starts to kick in.