As we analyse the RTS / ITS and the Final Report on the Guidelines for reporting under EMIR, recently published by ESMA we highlight some of the more significant changes.
We start with one of the new fields introduced by ESMA under EMIR REFIT, the Entity Responsible for Reporting field(1.3).
As explained by ESMA this new field is only applicable to OTC derivatives and the Entity Responsible for Reporting is applicable as follows:
- Where a financial counterparty is solely responsible, and legally liable, for reporting on behalf of both counterparties in accordance with Article 9(1a) of Regulation (EU) No 648/2012 of the Parliament and of the Council and the non-financial counterparty does not decide to report itself the details of its OTC derivative contracts with the financial counterparty, that financial counterparty.
- Where a management company is responsible, and legally liable, for reporting on behalf of an Undertaking for Collective Investment in Transferable Securities (UCITS) in accordance with Article 9(1b) of that Regulation, that management company.
- Where an Alternative Investment Fund Manager (AIFM) is responsible, and legally liable, for reporting on behalf of an Alternative Investment Fund (AIF) in accordance with Article 9(1c) of that Regulation, that AIFM.
- Where an authorised entity that is responsible for managing and acting on behalf of an IORP is responsible, and legally liable, for reporting on its behalf in accordance with Article 9(1d) of that Regulation, that entity.
Further to this, included in the Final Report on the Guidelines for reporting under EMIR is the 4.4 Allocation of responsibility for reporting. Here ESMA provides us with various scenarios and explains how each of the relevant fields should be populated:
| Scenario | Report submitting entity (field 1.2) | Entity responsible for reporting (field 1.3) | Counterparty 1 (field 1.4) | Counterparty 2 (field 1.9) | |
| FC reporting on behalf of NFC- in accordance with Article 9(1a) | Leg 1 | FC LEI | FC LEI | FC LEI | NFC- LEI |
| Leg 2 | FC LEI | FC LEI | NFC- LEI | FC LEI | |
| FC reporting on behalf of NFC- in accordance with Article 9(1a) and FC delegating to RSE | Leg 1 | RSE LEI | FC LEI | FC LEI | NFC- LEI |
| Leg 2 | RSE LEI | FC LEI | NFC- LEI | FC LEI | |
| NFC- opting out from FC reporting on their behalf in accordance with Article 9(1a) | Leg 1 | FC LEI | FC LEI | FC LEI | NFC- LEI |
| Leg 2 | NFC- LEI | NFC- LEI | NFC- LEI | FC LEI | |
| NFC- opting out from FC reporting on their behalf in accordance with Article 9(1a) FC delegating to RSE NFC- delegating to RSE2 | Leg 1 | RSE LEI | FC LEI | FC LEI | NFC- LEI |
| Leg 2 | RSE2 LEI | NFC- LEI | NFC- LEI | FC LEI | |
| NFC+ delegating to FC | Leg 1 | FC LEI | FC LEI | FC LEI | NFC+ LEI |
| Leg 2 | FC LEI | NFC+ LEI | NFC+ LEI | FC LEI | |
| NFC+ delegating to FC and FC subdelegating to RSE | Leg 1 | RSE LEI | FC LEI | FC LEI | NFC+ LEI |
| Leg 2 | RSE LEI | NFC+ LEI | NFC+ LEI | FC LEI | |
| NFC+ not delegating to FC | Leg 1 | FC LEI | FC LEI | FC LEI | NFC+ LEI |
| Leg 2 | NFC+ LEI | NFC+ LEI | NFC+ LEI | FC LEI | |
| Counterparty trading with a natural person not eligible for an LEI delegating to RSE | Leg 1 | RSE LEI | CP 1 LEI | CP 1 LEI | Client code as specified in ITS on reporting for field 1.9 |
| No Leg 2 reporting required | |||||
| The contract is an ETD | Leg 1 | FC LEI | FC LEI | FC LEI | NFC- LEI |
| Leg 2 | NFC- LEI | NFC- LEI | NFC- LEI | FC LEI | |
Original Table extracted from the Final Report on the Guidelines for reporting under EMIR
The ERR is an important field, as it will also identify the entity that will be responsible for notifying its competent authority and if different, the competent authority of the reporting counterparty of any of the following instances, as indicated in Article 9 of the ITS:
(a) any misreporting caused by flaws in the reporting systems that would affect a significant number of reports;
(b) any reporting obstacle preventing the report submitting entity from sending reports to a trade repository within the deadline referred to in Article 9(1) of Regulation (EU) No 648/2012;
(c) any significant issue resulting in reporting errors that would not cause rejection by a trade repository in accordance with Commission Delegated Regulation (EU) 2022/1858
