False assumptions

The recent Financial Conduct Authority (FCA) European Market Infrastructure Regulation (EMIR) Trade Reporting Seminar featured a surprise announcement surrounding EMIR trade reporting requirements. Contrary to popular belief, the FCA declared that it expects firms to immediately report trades opened since 16 August 2013 (the EMIR start date) that are still open when the trade reporting requirement comes into force on the 12 of February 2014.

Based on the lack of guidance in Article 5 of the Trade Reporting Implementing Technical Standards (ITS) document, it had been assumed that firms would be granted a 90 day post implementation window for reporting such trades, and indeed this is the guidance given on the FCA website’s EMIR pages. It’s now clear that this assumption was incorrect.

It seems that the FCA may exercise some discretion in enforcing this deadline, given that the announcement was somewhat contrary to their previous statements on the matter – although this should not be assumed. However, they themselves will have to ensure that their guidance is in line with that of other EMIR regulators.

This means that firms may have even more changes to make in the next 9 weeks, to ensure they can be compliant in time. Some had chosen to focus first on being able to comply with trade reporting for new trades only and to address back-loading post February - the assumed minimum day 1 requirement. Trade Repositories may also be more impacted than they had planned as firms scramble to test this aspect of trade reporting, alongside trying to get live for reporting new trades.