ReportShield™ provides accuracy for global trade and transaction reporting regimes, including EMIR, MiFIR, Dodd-Frank and more.
What is EMIR?
The European Market Infrastructure Regulation (EMIR) is an extensive set of requirements from the European Securities and Markets Authority (ESMA).
The regulation aims to improve transparency and reduce risks in derivatives markets.
Firms trading derivatives (financial and non-financial) must report details of all financial derivatives contracts to ESMA via a trade repository. This includes over-the-counter and exchange-traded derivatives.
Robust testing and controls for full EMIR compliance
Our ReportShield™ quality assurance service provides everything you need to be compliant with EMIR including:
- Testing of all EMIR open positions at the trade repository
- Checking and mapping of all client identifiers
- Advanced reconciliations between a primary trading system and records held at the trade repository
- Checking that all delegated reporting has been reported accurately and completely
- Complete governance framework
We can also provide expertise in a range of areas including remediation and selecting a trade repository.
Testing is mandatory
Testing and reconciliations are mandatory under Article 15 of Regulatory Technical Standards (RTS) 22 and the regulator has made it clear that its focus is now firmly on data quality.
Everything you need for MiFID II transaction reporting accuracy
Our ReportShield™ quality assurance service is designed to address Article 15’s requirements. It includes:
- Iterative accuracy testing of MiFID II trades reported to the regulator
- Advanced reconciliations on each platform/asset class to ensure completeness
- Implementation of a control framework tailored to your business
- Client and counterparty reference data testing
- CPD-accredited training on the new reporting requirements bespoke to your firm.
What is Post-Trade Transparency reporting?
It’s not just transaction reporting under MiFID II that investment firms need to be compliant with – compliance with real-time trade reporting is expected by regulators too.
What, when and how do you report?
- Near to real-time reporting to the market via FIX (Financial Information eXchange)
- One minute for equity and equity-like products
- 15 minutes for non-equity products (reducing to five mins by 2021)
- Reports are sent to an Approved Publication Arrangement (APA) for publication to the market
- Field requirements are limited to the trade financials (less than 15-20 fields)
- Anonymised and aggregated reporting to avoid reverse engineering.
How we can help
Kaizen’s ReportShield™ quality assurance service has been adapted to fit the requirements of MiFIR’s RTS 1 and 2, providing investment firms with controls they need to demonstrate they are meeting their real-time reporting obligations. This includes:
- Accuracy testing – to assess the correctness of all data on all trade reports sent to your APA of choice
- Advanced regulatory reconciliation – to check the completeness of the records in your primary trading system/s against those records held at the APA. This will include reconciliation of your input vs APA output, reconciliation cross-entities and reconciliation cross-regulations and cross-client base.
What is DFA?
The Dodd Frank Act (DFA) is aimed at improving transparency and reducing risks in derivative markets. It is a wide-ranging package of obligations on firms based in the US and in other jurisdictions relating to their internal and external business conduct, including reporting.
What do you have to report?
Firms trading derivatives must report details of swaps to the Commodities and Futures Commission (CFTC) via a swap derivatives repository. This includes the primary economic terms and any event that affects the valuations or terms of the contract (Part 45) to allow regulators to monitor systemic risk. There is also an obligation on firms to report in real-time to provide transparency on pricing to the market.
Like EMIR, DFA covers over-the-counter derivatives but unlike EMIR it excludes exchange-traded derivatives.
A full suite of controls for DFA reporting compliance
Our ReportShield™ quality assurance service gives you the ability to demonstrate appropriate control over your reporting obligations. Features include:
- Accuracy (correctness) testing of all DFA open positions at the trade repository
- Full governance structure, policy documentation, guidance and training for staff on the reporting obligation
- Completeness, validity and accuracy of reporting for Parts 43, 45 and 46
- Cross-regulation testing to ensure consistency with other regimes
- All client identifiers checked for appropriateness for the regulation and properly mapped
- Application of an advanced reconciliation between a primary trading system and the records held at the trade repository
- Validation that firms are classifying their clients and counterparties correctly in terms of US persons and regulatory status ie. swap dealer, non-swap dealer etc…
What is SFTR?
The Securities Financing Transaction Reporting Regulation (SFTR) is an extensive set of requirements from the European Securities and Markets Authority (ESMA). Article 4 – the reporting requirement – is due to go live in April 2020.
The regulation aims to improve transparency and reduce risks in securities financing markets; namely the repo, securities lending, buy-sellback and margin lending (prime brokerage) markets.
Firms trading securities financing products (financial and non-financial) must report details of all securities financing transactions to ESMA via a Trade Repository. This includes includes new trades, lifecycle events, CCP margining and a measure of collateral re-use.
We can help you prepare for SFTR reporting
Led by our SFTR subject matter expert Jonathan Lee, the former head of the ICMA Taskforce on SFTR, our pre go-live services include:
- Pre go-live testing of the accuracy of your reporting data
- Programme design and implementation
- Development and evaluation of an appropriate controls environment
- Training on reporting requirements
- Subject matter expert support
- Evaluation of vendor solutions
Our ReportShield™ quality assurance service is being adapted for SFTR and will include:
- Testing for the accuracy of every SFTR transaction reports
- Testing and mapping of all client identifiers, contractual and collateral reference data
- Advanced reconciliation between the records in your primary trading system and the records held at the Trade Repository
- Testing that all delegated reporting has been reported accurately and completely
- A control framework that including policy documentation and guidelines to meet the reporting requirements.
Beyond EMIR, MIFIR, Dodd Frank and SFTR, you may also face the challenge of reporting under other regimes such as HKMA, MAS, ASIC and Canada reporting.
ReportShield™ has been developed for multiple regulatory regimes so you can be sure your reporting is accurate no matter what the international regulation.
We can give you confidence in your reporting quality. Please get in touch to discuss your reporting challenges with one of our regulatory experts.