Reporting of CFDs under EMIR

There has long been a degree of confusion in the industry on how to trade report CFDs to a trade repository under EMIR. When it comes to reporting fungible CFDs, there have been two main schools of thought:

  1. Report every CFD as a new trade, each with a distinct UTI
  2. Report one original trade and treat it like a swap, modifying the trade notional amount/quantity (single UTI) following each subsequent trade.

This is an important issue for the industry because the trades reports from counterparties are never going to match if one counterparty adopts the multiple ‘new trade’ approach and the other adopts the single ‘swap modification’ approach. ESMA has confirmed that CFDs should be reported as new trades with separate UTI rather than a single UTI and subsequent modifications.