07 November 2013

Commission intends not to endorse ESMA's proposal to delay reporting start date for ETDs

The Commission intends not to endorse ESMA’s draft implementing technical standards submitted by ESMA on 7 August 2013 amending Implementing Regulation (EU) No 1247/2012.

ESMA has proposed to delay the reporting start date for exchange traded derivatives until 1 January 2015 in order for it to develop guidelines and recommendations to ensure a common, uniform and consistent application of Article 9 of Regulation (EU) No 648/2012 (EMIR). In particular, ESMA considers necessary to provide guidelines and recommendations on the identification of the counterparties of exchange traded derivatives, a consistent application of reporting requirements under EMIR and Directive 2004/39/EC (MiFID) to the extent possible, and the compatibility of the models, logic and formats used to identify all of the details to be reported as provided for in those two legislative acts.

Those concerns, however, do not justify the proposed delay in the implementation of the reporting of exchange traded derivatives to trade repositories under EMIR. In particular, the involvement of a chain of contracts in exchange traded derivatives does not prevent the identification of the counterparties or an adequate implementation of the reporting obligation. The existing differences between the reporting obligations under EMIR and MiFID are justified by the different addresses and the purposes of the reports under those two legislative acts and they do not appear to be an obstacle to the correct application of both reporting obligations. Moreover, those differences have already been taken into account by ESMA when preparing its original draft regulatory technical standards regarding reporting under EMIR.

Furthermore, postponing the starting date of the reporting obligation for exchange traded derivatives would hinder the achievement of a key objective of EMIR, that is, the identification, monitoring, assessment and mitigation of systemic risk arising from derivative contracts by almost one year. Therefore, the proposed postponement runs counter to the principle of ensuring the stability of the financial system and the functioning of the internal market for financial services.

Communication

A spokesperson for ESMA stated that its focus would now be the development of proper guidance to ensure consistent implementation of the Regulation. This guidance will now be fast-tracked to meet the February start date.

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