UK EMIR REFIT: Key Changes and Reporting Deadlines
The UK Financial Conduct Authority (FCA) and the Bank of England (BoE) are set to implement significant updates to the reporting requirements for over-the-counter (OTC) derivatives under the UK EMIR REFIT framework, which will come into effect end of September 2024. These changes aim to align the UK’s derivatives reporting regime with international standards and enhance the overall transparency, accuracy, and regulatory oversight in the derivatives market. With the compliance deadline set for the 30th of September 2024, market participants must promptly adapt their reporting practices to conform to the revised requirements. The UK EMIR REFIT introduces a wide array of alterations designed to improve data quality and streamline regulatory processes. Some of the key differences introduced by the UK EMIR REFIT are: ISO 20022 XML Data Format: The UK EMIR REFIT mandates the adoption of the ISO 20022 messaging standard for reporting. This standardized format facilitates better data exchange and interoperability between market participants and regulatory authorities, ensuring more consistent and reliable reporting. Unique Trade Identifier (UTI) and Unique Product Identifier (UPI): The UK EMIR REFIT introduces more detailed transaction and instrument information, enhancing traceability and risk assessment. These changes align the UK’s reporting framework with global standards, similar to those adopted in the EU, USA, ASIC and other jurisdictions. Event Type and Action Type: The combination of event types and action types results in numerous distinct and permissible value combinations, significantly altering lifecycle event management. This requires specific actions within the reporting system of each entity, ensuring more precise and comprehensive event reporting. New and Expanded Reporting Details: Market participants must include additional or expanded details in their reports. The number of fields increases from 129 to 204. This includes fields related to notional schedules, spreads and options, other payment types, and package fields. These enhancements aim to provide regulators with deeper insights into market activities and improve data quality. Re-reporting: Under the UK EMIR REFIT, re-reporting must occur within six months of the go-live date. Reporting Entities must update all affected fields (except UTI) for outstanding trades to meet the new standards. New EoD and Intraday Reports: Counterparties will receive streamlined trade and margin-related intraday and end-of-day reports. These reports provide enhanced transparency and clarity into their reporting activities, facilitating better risk management, compliance oversight, and informed decision-making. Reporting Significant Issues to Regulatory Authorities: This new requirement mandates the disclosure of any significant issues encountered during the reporting process. These issues could include obstacles that prevent reporting, misreporting due to system flaws, or issues resulting in reporting errors that would not cause rejections by a TR. The objective is to enhance regulatory oversight and ensure timely intervention to mitigate potential risks. In conclusion, the UK EMIR REFIT marks a substantial overhaul of derivatives reporting in the UK, introducing comprehensive reforms aimed at bolstering transparency, data quality, and regulatory oversight. Market participants must swiftly adapt to these changes to ensure seamless compliance with the revised regulatory landscape. By staying ahead of these regulatory updates, firms can not only meet compliance requirements but also leverage improved data quality for better risk management and strategic decision-making. How Complyport Tech may assist To navigate this complex landscape seamlessly, trust Complyport Tech’s expertise, cutting-edge technology and customised solutions. Our team provides expert guidance to ensure your understanding of the implications of UK EMIR REFIT, while our advanced reporting solutions ensure accuracy and efficiency. With personalized support and ongoing assistance, we can assist you to swiftly adapt and confidently embrace compliance in this evolving regulatory environment. Furthermore, we now have the benefit of extensive experience from the EU EMIR REFIT, which can significantly aid in the implementation of the UK EMIR REFIT. This prior experience has equipped us with a deep understanding of potential challenges and best practices, enabling us to anticipate issues and provide proactive solutions. By leveraging our insights from the EU framework, we can ensure a smoother and more informed transition, minimising disruptions and enhancing your compliance processes.
MAS Rewrite: Key Changes and Reporting Deadlines
The Monetary Authority of Singapore (MAS) is set to implement significant updates to the reporting requirements for over-the-counter (OTC) derivatives in October 2024, harmonising Singapore’s Derivatives’ Reporting regime with the IOSCO-CPMI critical derivatives elements work. With the compliance deadline set for October 21st, 2024, market participants must swiftly adapt their reporting practices to align with the revised requirements. The MAS Rewrite introduces a plethora of alterations aimed at enhancing transparency, data accuracy, and regulatory oversight in the derivatives market. Some of the key differences that are introduced by the MAS Rewrite are: ISO 20022 XML Data Format: The MAS Rewrite mandates the adoption of a new reporting format, leveraging the ISO 20022 messaging standard. This standardized format streamlines data exchange and improves interoperability between market participants and regulatory authorities. Unique Trade Identifier (UTI) and Unique Product Identifier (UPI): Introduction of more detailed transaction and instrument information to improve traceability and risk assessment. These will have identical modalities as those introduced in other jurisdictions such as the EU, the UK, the ASIC and the USA. Event Type and Action Type: The combination of these two fields results in dozens of distinct and permissible combinations of values. This significantly alters lifecycle event management, necessitating specific actions within the entity’s reporting system. Collateral and Valuation reporting: Introduction of mandatory reporting on the valuation of derivatives and associated collateral, aimed at providing a clearer view of exposure and credit risk. New and expanded Reporting Details: In general, market participants are obligated to include additional or expanded details and values in their reports, like the Notional Schedule fields, Spreads and Options related information, information related to Other Payment Types, Package fields, Action Type Revive, Event Types, and more. These enhancements aim to provide regulators with deeper insights into market activities. Re-reporting: Re-reporting must take place within six months of go-live. There is an exemption for re-reporting of information that previously was not captured at the point when the contract was executed. No re-reporting is required for contracts with a maturity of less than six months from the go-live date. New EoD and Intraday Reports: Counterparties will be receiving streamlined Trade and Margin related intraday and end of day reports, which will empower them by providing enhanced transparency and clarity into their reporting, facilitating their risk management, compliance oversight and informed decision-making. T+2 Reporting Deadline: The MAS Rewrite stipulates a T+2 reporting timeline, requiring market participants to submit derivative transaction reports within two business days following the transaction execution date. Reporting Significant Issues to Regulatory Authorities: This new requirement mandates the disclosure by the reporting party of any significant issues (defined as reporting obstacles that prevent reporting, misreporting by a reporting system flaw or an issue that causes a large number of rejected reports) encountered during the reporting process. The objective is to enhance regulatory oversight and ensure timely intervention to mitigate potential risks, thereby maintaining the integrity and stability of the financial market. In conclusion, the MAS Rewrite heralds a new era of derivatives reporting in Singapore, ushering in comprehensive reforms aimed at bolstering transparency, data quality, and regulatory oversight. Market participants must swiftly adapt to these changes to ensure seamless compliance with the revised regulatory landscape. How Complyport Tech may assist To navigate this complex landscape seamlessly, trust Complyport Tech’s expertise, cutting-edge technology and customised solutions. Our team provides expert guidance to ensure your understanding of the implications of MAS Rewrite, while our advanced reporting solutions ensure accuracy and efficiency. With personalized support and ongoing assistance, we can assist you to swiftly adapt and confidently embrace compliance in this evolving regulatory environment.
Complyport Tech Wins Best RegTech Reporting Solution at Global Forex Awards 2024
We’re thrilled to announce that Complyport Tech has been honoured with the prestigious award for Best RegTech Reporting Solution at the esteemed Global Forex Awards 2024. The annual Global Forex Awards – B2B, now in their fifth year, celebrate businesses that are pushing the boundaries of innovation in B2B forex trading solutions. Recognised globally, these awards encompass the entire industry, highlighting the most pioneering and impactful contributions. Panayiotis Omirou, CEO of Complyport Tech commented: “We are always very proud when the market recognises us with an award. This acknowledgment highlights our deep expertise and innovative solutions, which enable our clients to simplify compliance and efficiently manage their complex regulatory reporting requirements. Winning such accolades represents the culmination of our efforts to drive positive change in the RegTech industry and empower financial institutions to navigate regulatory complexities with confidence.” To see this year’s category winners click here. For more information about Complyport Tech and our award-winning solutions, click here.
UPI: A new data element for OTC derivatives reporting
One of the many changes that EU’s EMIR REFIT usher in is the UPI, or Unique Product Identifier. The UPI will be deployed across many jurisdictions including, but not limited to, Australia, Singapore, Europe (the EU and the UK) as well as the USA. The road towards a globally endorsed UPI The UPI was introduced under EMIR version 1, but at the time Securities Commissions/Central Banks and other interested parties had yet to agree on a global standard. In fact, in the current EMIR RTS under Product classification, pundits will notice that the UPI exists as an option but as per the specs “For products for which ISIN or AII are not available, endorsed Unique Product Identifier (UPI) shall be specified. Until UPI is endorsed those products shall be classified with CFI code.” At an international level, the International Organisation of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) set to work on the UPI and in 2017, they published the Technical Guidance (to authorities) on the Harmonisation of the Unique Product Identifier. The Financial Stability Board (FSB) following the issuance of the aforesaid guidance assigned the Derivatives Services Bureau (DSB), a subsidiary of the Association of National Numbering Agencies (ANNA), as the sole issuer of the UPI codes, while the Regulatory Oversight Committee (ROC) was appointed as the International Governance Body for the UPI Standard. See below a brief video prepared by ANNA DSB on the UPI When do you need a UPI in the EU? With the advent of EMIR REFIT and given that the preparatory work was finalised for the adoption of a global UPI standard, UPIs will be required for instruments which do not have an ISIN and are not listed on an EU Trading Venue (meaning a Regulated Market, Multilateral Trading Facility, or Organised Trading Facility) or, not executed with a Systematic Internaliser (SI) or, not listed on third country organised trading platforms. The new rules are very specific that instruments should be identified either with an ISIN or with a UPI (there will not be a situation where both identifiers will be required). However, as mentioned in ESMA’s validation rules, ISINs are required where the Venue of Execution data field is populated with a MIC code of EU Trading Venues, or SIs, or with the value XOFF. XOFF signals that the instrument in question is listed on a Trading Venue but the transaction did not take place on said venue, or with an SI or, on organised trading platforms outside the EU. We should note here, that all instruments listed on EU (and UK) trading venues are required to be identified with an ISIN since 2018, with the advent of MiFID II/ MiFIR package and more specifically, mandated under Regulation EU 2017/585 supplementing MiFIR. Moreover, for instruments listed on third country venues exclusively (which should be identified in the EMIR REFIT report with their MIC code, where the said execution took place on the third country venue) and where those third country venues do not identify their instruments with an ISIN, both the ISIN and UPI field can be left blank (UPI in this case is marked as optional). Invariably, from the above it is evident that the following classes of non-listed derivatives are likely to be captured by the UPI requirement, the below list is not exhaustive: Forward contracts (e.g. NDFs on various assets traded between FCs and/or NFCs, Virtual Power Purchase Agreements between Wholesale Energy Producers – Consumers); Options (e.g. Stock option programmes some firms offer as part of employee remuneration packages, digital or binary options); Contracts for Difference; Swaps (e.g. Total Return Swaps, Fixed-For Floating Swaps, Currency Swaps); Etc. In our next blog post on the UPI, we will deep dive into the technical documentations of the UPI code, in order to assist the market participants understand how to generate or retrieve the UPI as necessary. How is MAP FinTech going to assist? MAP Fintech offers the UPI Link Service that helps retrieving companies match their products’ attributes precisely to those already issued UPIs, ensuring that reporting companies use the correct UPI Code. MAP FinTech’s UPI Link Service boasts essential functionalities, including: Automated identification of UPIs using reference data provided by the reporting entity and the latest issued UPIs supplied by the ANNA-DSB. UPI enrichment of reported files prior to submission to the TR. Error identification where UPIs cannot be mapped against the ANNA-DSB’s issued UPI records. Inline editing capability for on-the-fly amendments on the UPI. Advanced search function from within Polaris portal which can pinpoint the exact UPI based on enhanced search criteria.
Additional Instruments Captured by updated EU MiFIR – an overview
Instruments captured by EU MiFIR reporting, divergence from UK MiFIR requirements With the departure of the UK from the EU it was expected that at some point, the EU and the UK regulatory regimes will start diverging. With Regulation 2024/791 amending MiFIR, the EU has introduced new asset classes which are now captured by the MiFIR reporting obligation. The amended rules came into effect on the 28th of March 2024. The new instruments captured under EU-MiFIR are not, currently, subject to the UK’s MiFIR reporting obligation. As per the amended MiFIR, the obligation to report transactions (Article 26.2) has been amended and applies as follows: financial instruments which are admitted to trading or traded on a trading venue or for which a request for admission to trading has been made, irrespective of whether such transactions are carried out on the trading venue, with the exception of transactions in OTC derivatives other than those referred in Article 8a(2), to which the obligation shall apply only when carried out on a trading venue; financial instruments where the underlying is a financial instrument that is traded on a trading venue, irrespective of whether such transactions are carried out on the trading venue; financial instruments where the underlying is an index or a basket composed of financial instruments that are traded on a trading venue, irrespective of whether such transactions are carried out on the trading venue; OTC derivatives as referred to in Article 8a(2), irrespective of whether such transactions are carried out on the trading venue. While points (a) through to (c) introduce nothing new, the inclusion of (d) adds 2 additional types of OTC derivatives. Types of instruments captured by the new MiFIR reporting obligation As per Article 8a(2) of EU MiFIR the following types of instruments denominated in EUR, JPY, USD or GBP are now captured by the MiFIR reporting obligation. Type 1: OTC derivatives declared by the EU as subject to the clearing obligation under EMIR, and where those derivatives are interest rate derivatives have specific tenors (years till maturity); Type 2: OTC derivatives – Credit Default Swaps that reference a Global Systematically Important Bank (G-SIB) and that are centrally cleared or, that reference an index comprising G-SIBs and that are centrally cleared. For illustration purposes, please see below select Asset Class and Instruments captured (indicative and non-exhaustive). Asset Class Instrument Type Underlying Reference Product ID / Comments Type 1 Interest Rates Swap EURIBOR Basis Swaps Interest Rates Swap EURIBOR Fixed-to-float Swaps Interest Rates Forward EURIBOR Forward Rate Agreements Interest Rates Swap €STR Overnight Index Swaps Interest Rates Swap TONA Overnight Index Swaps Interest Rates Swap FedFunds Overnight Index Swaps Interest Rates Swap SOFR Overnight Index Swaps Interest Rates Swap SONIA Overnight Index Swaps Credit Credit Default Swap (CDS) iTraxx Europe Main CDS Untranched Index Credit Credit Default Swap (CDS) iTraxx Europe Crossover CDS Untranched Index Type 2 Credit Credit Default Swap (CDS) G-SIBs CDS on Single Name Credit Credit Default Swap (CDS) Index comprised of G-SIBs CDS on Index For the list of G-SIBs, refer to the Financial Stability Board (FSB) as of November 2023. For the instruments subject to clearing, under EU EMIR, refer to ESMA’s registry section 1.1. *Disclaimer the above is for information purposes only. For an up-to-date list of instruments captured consult with the applicable regulation, lists of instruments subject to clearing, FSB announcements and your compliance risk management teams. How is Complyport Tech going to assist Our MiFIR Transaction Reporting service allows clients to seamlessly report their transactions in Financial Instruments as required by the Markets in Financial Instruments Regulation (MiFIR, Article 26). Clients can report to National Competent Authorities either directly or through an Approved Reporting Mechanism using our award-winning Polaris Platform. Transaction data is seamlessly processed, validated, and submitted in the required format through our fully automated service. Solution includes consolidated data feeds, automatic checks, a robust reconciliation engine and continuous regulatory updates. Clients enjoy optimised technology, cost savings, expert training, and transparent monitoring of their reporting via the Polaris dashboard. For more information or to schedule a demo, please contact our team of experts.
Complyport Tech Shortlisted for Regulatory Solution of the Year!
We are thrilled to announce that Complyport Tech has been shortlisted for the prestigious Regulatory Solution of the Year award at the Securities Finance Times Industry Excellence Awards for 2024! The Securities Finance Times Industry Excellence Awards honour the most talented and dedicated firms, individuals, and departments across the financial services industry. Winners are chosen by a judging panel that consists of independent industry professionals. We extend our heartfelt gratitude to the Securities Finance Times and the distinguished judges for acknowledging our efforts. We look forward to the awards ceremony and are honoured to be considered among the best in the industry.
Complyport Tech Wins Best EMIR Solution Provider at 2024 RegTech Insight Awards
We are excited and honored to announce that Complyport Tech has once again received the award for Best Solution for EMIR at the 2024 RegTech Insight Europe Awards. These awards celebrate RegTech solutions that excel in aiding financial services firms worldwide to efficiently and adaptively meet their regulatory obligations. Panayiotis Omirou, CEO of MAP FinTech, said: “We are delighted to receive this esteemed award once again. As one of the pioneering providers in Europe for European Market Infrastructure Regulation, having successfully processed billions of transactions, this accolade reaffirms our dedication to staying ahead of regulatory changes. With the changes brought by EMIR REFIT, this recognition underscores our unwavering commitment to keeping our clients well-prepared for new challenges.” Contact our team for more information on our RegTech services.
Together we are strong! Complyport Tech teamed up for another blood donation drive
MAP S.Platis Group has again demonstrated its unwavering commitment to Corporate Social Responsibility by hosting its annual blood donation drive for employees. This year’s event took place at our Limassol offices in collaboration with the Alkinoos Artemiou Foundation and the Limassol General Hospital. The MAP FinTech team enthusiastically participated, with a high turnout showcasing our dedication to fostering a healthier community and supporting those in need. We’re proud to contribute to such a vital cause and are grateful to everyone who made this event possible. Together, we continue to make a positive impact on our community, setting a strong example of corporate citizenship!
ASIC Rewrite: Key Changes and Reporting Deadlines
The Australian Securities and Investments Commission (ASIC) is set to implement significant updates to the reporting requirements for over-the-counter (OTC) derivatives in October 2024, harmonising Australia’s Derivatives’ Reporting regime with the work carried out by IOSCO-CPMI on critical derivatives elements. With the compliance deadline set for October 21st, 2024, market participants must swiftly adapt their reporting practices to align with the revised requirements. The ASIC Rewrite introduces several changes to enhance transparency, data accuracy, and regulatory oversight in the local derivatives market. Some of the key differences that are introduced by the ASIC Rewrite are: ISO 20022 XML Data Format: The ASIC Rewrite mandates the adoption of a new reporting format, leveraging the ISO 20022 messaging standard. This standardized format streamlines data exchange and improves interoperability between market participants and regulatory authorities. Unique Trade Identifier (UTI) and Unique Product Identifier (UPI): This updated iteration introduces more detailed transaction and instrument information to improve traceability and risk assessment. These will have identical modalities as those introduced in other jurisdictions such as the EU, the UK, and the USA. Additional Details on Counterparties: There will be increased granularity on the type and location of entities involved, facilitating better counterparty risk evaluation. Collateral and Valuation Reporting: Mandatory reporting on the valuation of derivatives and associated collateral will be introduced, aimed at providing a clearer view of exposure and credit risk. New and Expanded Reporting Details: Market participants will be obligated to include additional or expanded details and values in their reports, like the Notional Schedule fields, Spreads and Options related information, information related to Other Payment Types, Package fields, Action Type Revive, Event Types, Delta values, and more. These enhancements aim to provide regulators with deeper insights into market activities. New Reports: Counterparties will be receiving streamlined Trade and Margin related intraday and end-of-day reports, which will empower them by providing enhanced transparency and clarity into their reporting. This will facilitate their risk management, compliance oversight, and informed decision-making. T+2 Reporting Deadline: ASIC Rewrite stipulates a T+2 reporting timeline, requiring market participants to submit derivative transaction reports within two business days following the transaction execution date. In conclusion, the ASIC Rewrite heralds a new era of derivatives reporting in Australia, ushering in comprehensive reforms aimed at bolstering transparency, data quality, and regulatory oversight. Market participants must swiftly adapt to these changes to ensure seamless compliance with the revised regulatory landscape. How Complyport Tech May Assist To navigate this complex landscape seamlessly, trust Complyport Tech’s expertise, cutting-edge technology and customised solutions. Our team provides expert guidance to ensure your understanding of the implications of the ASIC Rewrite, while our advanced reporting solutions ensure accuracy and efficiency. With personalized support and ongoing assistance, we can help you swiftly adapt and confidently embrace compliance in this evolving regulatory environment.
Navigating the Complexities of Complying with CRS and FATCA Reporting Obligations: A Guide for Financial Institutions
In the evolving landscape of global finance, adherence to regulatory mandates such as the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) is paramount. These frameworks are at the forefront of international efforts to combat tax evasion and enhance the transparency of financial transactions across borders. However, for financial institutions operating in multiple jurisdictions, these regulations present a maze of complexities and compliance challenges. The Challenge at Hand The intricate and ever-changing nature of CRS and FATCA regulations requires businesses to stay abreast of updates and adapt their compliance strategies accordingly. With requirements varying from one country to another, the task of understanding and implementing these rules can be daunting. Non-compliance is not an option, as it can lead to severe financial penalties, reputational damage, and legal repercussions. How RegTech Solutions Can Help In this digital age, leveraging technology is not just an option; it’s a necessity for efficient and effective compliance. RegTech solutions offer automated tools for data collection, validation, and reporting, significantly reducing the potential for error and improving compliance efficiency. The Complyport Tech Advantage At Complyport Tech, we understand the intricacies of CRS and FATCA reporting. Our comprehensive suite of reporting services is designed to alleviate the burden of compliance, allowing financial institutions to focus on their core business activities. Key features of our offering include: Cost-efficient Reporting Solutions: Integrated under a single platform for ease and efficiency. Highly Automated and Scalable Solutions: Capable of managing accounts in large volumes, regardless of size. Flexibility in Data Collection: Accommodating standard templates or raw data input. Robust Reporting Health Checks: Ensuring accuracy in both content and schema, with automatic filtering of erroneous entries. Automatic conversion of data to XML and separation of files based on tax residency. Submissions to various tax authorities worldwide. Regulatory Update Compliance: Continuous communication with regulators to reflect the latest changes and updates. As shown below, the reporting deadline to the relevant tax authorities in most participating jurisdictions is either near or already underway in some jurisdictions. The importance of being prepared cannot be overstated. With Complyport Tech’s RegTech solutions, businesses can ensure they meet their reporting obligations efficiently and effectively, avoiding the pitfalls of non-compliance. Please feel free to contact our team of experts for more information or to schedule a consultation.