EMIR Refit: Five Key Takeaways from Kaizen RegTalk

EMIR Refit is one of the most significant pieces of regulatory change in financial services in recent years. At our recent Kaizen RegTalk conference, we hosted a panel discussion: “EMIR Refit – One Year On” bringing together speakers from the Financial Conduct Authority (FCA), Bank of England, HSBC as well as Kaizen’s subject matter expert Tim Hartley, to share their experiences of the implementation. The panel was hosted by John Graham from the Futures Industry Association (FIA). 

To set the scene, the EMIR panel commenced with a live audience poll asking how firms felt about their EMIR Refit experience one year on. The results painted an interesting picture: 

• 47% said it went “about as expected,” 

• 20% found it “smoother than expected.” 

• 20% are “still working through issues,” and 

• 13% found it “more challenging than expected.” 

These results confirm the broad industry view that firms made good progress in ensuring compliance at go live, and were able to submit successfully, but that momentum has slowed down as firms focus on their ‘day two’ book of work. 

Here are five key takeaways from our panel discussion:

1. Learning from the challenges of EU go-live 

Firms with dual reporting obligations in the UK and EU had the advantage of going live first with EU EMIR Refit and then five months later with UK EMIR Refit. The staggered go-live dates meant that firms had the chance to see what worked and what didn’t in the EU regime, providing them with the opportunity to rectify errors and improve processes in time for UK implementation. 

The majority of UK firms reported successfully on day one with high acceptance rates and minimal disruptions, which is reflected above in the total 67% of firms who highlighted a positive experience of go-live (i.e. “about as expected” and “smoother than expected”).

2. Now is the time to focus on data quality

While the initial focus was on acceptance rates, the panel participants made it clear that getting technically connected and having reports accepted was only the beginning. Many firms are meeting the validation rules, and trade repository rejection rates are thankfully low. However, firms can be compliant with the validation rules BUT still have inaccuracies in their data – the focus for firms now must be to identify and locate issues and remediate them.   

Many firms are now spending significant time and resources on fixing errors that are still ongoing, and the industry is grappling with the much more difficult task of ongoing data quality management. 

Key issues that firms continue to face include: 

• Matching Problems: while pairing rates are getting better, reconciliation breaks still create significant work. Different interpretations between counterparties on certain fields are causing ongoing headaches. 
• Counterparty Data Issues: this is especially problematic when firms use delegated reporting, where maintaining oversight while relying on third parties creates practical challenges with reporting for the same legal entity. 
• More Changes Coming: additional reconciliation fields will be rolled out in phases, indicating that firms need to stay prepared. 

3. Resilience during periods of increased volatility 

One area discussed by the panel participants was how well systems are coping under pressure for example, during the recent ‘Liberation Day’ market stress and volatility, reporting volumes jumped from 30 million to 76 million reports per day – more than double average volumes. But firms’ systems and teams across the industry managed the increased reporting volumes smoothly.

4. ‘Regulatory decay’ 

The panel highlighted something that is often underestimated: the ongoing effort required to continue to align with regulatory requirements after implementation and go-live. Budget pressures and limited team resources means firms need to prioritise which problems to fix first. 

A major concern raised was “regulatory decay” – losing knowledge as team members move onto new projects. Firms realise they need strong processes in place to maintain standards and grow the expertise they’ve built in-house. 

5. Regulators ARE using the data

Regulators from the Bank of England and FCA gave insights into how they are actually using EMIR data, which reinforces why it’s so important to get reported data correct: 

• Policy Decisions: the data goes directly to the Financial Policy Committee and Monetary Policy Committee 

• Watching Markets: real-time monitoring of risks and market concentration 

• Crisis Response: quick analysis when firms fail (like Silicon Valley Bank) — results in minutes, not days 

• Stress Testing: using detailed derivatives data for policy planning 

• Market Abuse: every FCA investigation in the past decade has started with data from transaction reports. 

Looking Ahead 

Panel participants made it clear that the key lesson from the EMIR Refit implementation is that it wasn’t a one-time project. Meeting the regulatory obligation is an ongoing process that requires constant attention to data quality and systems management, especially given how important this data is to regulators and what it’s being used for. 

Concerned about the quality of your EMIR Reporting data? More than 200 firms from tier 1 banks to small fund managers rely on Kaizen’s quality assurance to meet – and exceed – their regulatory obligations. Contact us to request a demo or for a conversation with one of our regulatory experts.