The European Securities and Markets Authority (ESMA) has issued a range of updated statements to address the impact on reporting under the European Market Infrastructure Regulation (EMIR) and the European Union (EU) Securities Financing Transaction Regulation (SFTR). This follows the previously published documents which were in prepared as a contingency for a no-deal Brexit scenario in 2019.
Similar to EMIR for the reporting of all derivatives to Trade Repositories (TR’s) for enhancing the transparency of the derivatives markets, SFTR is the EU’s response in order to reduce the perceived ‘shadow banking’ risks across the securities financing markets.
Three statements have been updated which address the impact on reporting under EMIR and SFTR, in addition to the impact on the operation of ESMA databases and IT infrastructure after the 31st December 2020 when the UK’s transition from the EU ends.
ESMA mentions the following updates:
- Statement on issues affecting EMIR and SFTR reporting – covering issues affecting reporting, recordkeeping, reconciliation, data access, portability and aggregation of derivatives under Article 9 EMIR and of securities financing transactions reported under Article 4 of SFTR;
- Statement on the use of UK data in ESMA databases and performance of MiFID II calculations – the statement provides details regarding that the UK Financial Conduct Authority (FCA) will cease sharing data with ESMA and will no longer have access to ESMA’s IT applications and databases. Consequently, UK-related data will not be included in the ESMA databases or published on their website. It also covers MiFID II/MiFIR publications performed by the various ESMA databases, as well as the annual ancillary activity calculations;
- Statement on ESMA’s Data Operational Plan – the statement aims to compliment above mention of ESMA’s IT-systems on the use of UK data in ESMA’s databases and performance of MiFID II calculations after the end of the transition period. It also includes the covering actions related to FIRDS, FITRS, DVCAP, transaction reporting systems, and ESMA’s registers and data.
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