The Cyprus Securities and Exchange Commission (CySEC) issues Circular C616 as a reminder to Regulated Entities about the recent publication of the European Securities and Markets Authority (ESMA) Guidelines for reporting under the European Market Infrastructure Regulation (EMIR). These comprehensive guidelines, officially released on October 23, 2023, and translated into all EU official languages, aim to enhance the quality and standardization of reporting, ensuring effective systemic risk monitoring.
Key Points:
- Applicability: The ESMA Guidelines apply to both financial and non-financial counterparties involved in derivatives, as defined in Articles 2(8) and 2(9) of EMIR. Additionally, they extend to trade repositories (TRs) defined in Article 2(2) of EMIR and competent authorities.
- Scope: The Guidelines specifically address derivatives reporting obligations outlined in Article 9 of EMIR and the corresponding obligations of trade repositories as per Articles 78 and 81 of EMIR.
- Foundation: Grounded in Article 16(1) of ESMA’s Regulation, the Guidelines serve multiple purposes, chiefly promoting harmonization and standardization of reporting under EMIR. This harmonization is crucial for maintaining high-quality data necessary for effective systemic risk monitoring. Moreover, it aids in cost containment across the reporting chain, benefiting reporting counterparties, TRs, and supervisory authorities utilizing the data for regulatory purposes.
- Key Clarifications: The Guidelines provide valuable clarifications on various aspects, including:
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- Transition to reporting under the new rules
- Determining the number of reportable derivatives
- Exemption from reporting for intragroup derivatives
- Delegation of reporting and allocation of reporting responsibilities
- Reporting logic and the population of reporting fields
- Reporting requirements for different types of derivatives
- Ensuring data quality by counterparties and TRs
- Construction of the Trade State Report and reconciliation of derivatives by TRs
- Data access considerations
- Implementation Date: Regulated entities should note that the Guidelines will come into effect from April 29, 2024, giving them time to prepare for the transition and adapt their reporting practices accordingly.
- CySEC’s Commitment: CySEC has embraced the ESMA Guidelines by incorporating them into its supervisory practices and regulatory approach. This commitment reinforces the regulator’s dedication to maintaining high standards in financial reporting and ensuring compliance with evolving regulatory frameworks.
As the financial landscape continues to evolve, staying informed about regulatory changes is paramount. CySEC’s proactive adoption of the ESMA Guidelines underscores the commitment to a robust and standardized reporting framework, benefiting both regulated entities and the broader financial ecosystem. Regulated entities are encouraged to familiarize themselves with the Guidelines and take necessary steps to align with the new reporting requirements by the specified implementation date.
*Regulated Entities:
- Cyprus Investment Firms (“CIFs”)
- UCITS Management Companies (“UCITS MC”)
- Alternative Investment Fund Managers (“AIFMs”)
