ESMA Changes Stance on EMIR Position Reporting
ESMA's latest EMIR Q&A set to profoundly impact many firms. ESMA has declared that EMIR trade reporting at a position level could be a mandatory requirement if criteria in the latest version of its TR Question 17 are met.
In the latest version of its EMIR Q&A (30 May), ESMA states:
“Therefore, it should be noted that reporting at position level should be done consistently by both counter-parties to the derivative, i.e. it is not allowed that one counterparty reports subsequent updates at trade level, while the other reports those updates at position level. Furthermore, in certain circumstances reporting at position level is the only possible option to comply with EMIR reporting obligations (hence it becomes mandatory in order to report correctly), e.g. when the counterparties are not able to value the individual position components.”
It is understood that this change in the Q&A is the first step to extend the pairing and matching of trade reports to position reports as well.
Another change detailed in the Q&A is a requirement to report to report each modification of individual underlying ToTV components of a basket derivative. ESMA latest Q&A document can currently be found at https://www.esma.europa.eu/press-news/esma-news/esma-updates-its-emir-qas