Updated EMIR trade reporting rules set stage for fines
Kaizen’s CEO Dario Crispini spoke with Thomson Reuters Accelus about the revised EMIR trade reporting regime which aims to bring clarity to the regulatory technical standards first published in 2012.
“Potentially the EMIR review is more important from an enforcement perspective than it is from an reporting perspective. I do expect to see some fines. The U.S regulators are further ahead and we will see some Dodd Frank fines first. The EMIR review does provide more of a legal platform for taking enforcement action across the various countries. It will be the enforcement processes of the relevant national competent authorities that are applied, which are not EU-wide,” Crispini said.
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One of the main reasons behind ESMA’s decision to revise the trade reporting RTS was to convert the guidance set out in the many Q&As and the level one and two validation processes into technical standards.
The EMIR review brings new rules such as the RTS covering product identification and classification, as well as introducing clear obligations regarding unique trade identifier exchange and the timing of UTI exchange.
“The EMIR review takes many guidelines published by ESMA in the Q&As and makes them regulations or secondary legislation that cannot be contested from an enforcement point of view. For example, if firms have not created a UTI according to the new guidelines, because they are now RTS, they can’t say it was only a guideline. It makes the enforcement process easier for each of the National Competent Authorities,” Crispini said.
Read Dario’s recent EMIR opinion piece on mandatory clearing: Why populating the clearing obligation field won’t be so easy