On February 11th and March 20th 2014 ESMA updated its FAQ (the “FAQ”) on the implementation of Regulation (EU) no. 648/2012 on OTC derivatives, central counterparties and trade repositories (“EMIR”).
New questions have been added and some of the existing answers have also been modified for improved clarity. All sections from the previous Q&A have been updated except for the one relating to exchange traded derivative reporting.
The document provides new guidance in a number of areas and the main add-ins include the following :
- Clarification that the fee information that Central Counterparties (CCP) and Clearing Members (CM) must make publicly available is expected to be published on a website of the firm in an easily identifiable page without access limitation (CCP Q16).
- Confirmation that it is not compliant with EMIR to not report to a trade repository the identity of a counterparty even if its local legislation prohibits disclosure of its identity since the requirement set forth under Article 9(5) of EMIR cannot be waived (TR Q 10 (d)).
- Clarification on the cases where the fields specified in the Annex to the Commission Delegated Regulation (EU) no. 148/2013 relating to the reporting to trade repositories are not mandatory and therefore may be left blank (TR Q 20).
- Guidance on the criteria to be applied by two counterparties to determine the one that would generate the Unique Trade ID (TR Q 19) and on how to assign a Unique Product Identifier (UPI) when common product taxonomies such as ISIN are not available (TR Q 21).
- Guidance on what to include in notifications to national competent authorities pursuant to Article 3 of EMIR when counterparties of a same group apply for the intragroup exemptions pursuant to Article 4(2) of EMIR (OTC Q 6).
- Clarification that where the transactions are CCP cleared at a third country CCP not recognised under Article 25 of EMIR the EU-based counterparty is not required to apply risk mitigation techniques under Article 11 of EMIR as those are only applicable to transactions that are not cleared irrespective of the status of the CCP under EMIR (OTC Q 12).
- How to identify the buyer and the seller in a FX forward transaction (TR Q 24).
The updated FAQ is available at : http://www.esma.europa.eu/system/files/2014-297_qa_vii_on_emir_implementation_20_march_14.pdf