Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013 - (Page 27)

FORUM A couple of principles should be noted: – The reporting obligation applies without exception to all corporates – All derivative transactions outstanding on 16 August 2012 and/or initiated since whether “live” or matured will need to be “back loaded”/reported to a TR – Reporting must be done on a T+1 business day basis after completion of the trade – Both market-facing and intragroup activity must be reported Can the reporting obligation be outsourced? Under EMIR, both counterparts to a derivative transaction are obliged to report. However, the reporting obligation can be outsourced, either entirely or partially, to financial counterparts, third-party middleware vendors, execution, matching and/or clearing platforms, or carried out directly by the trading counterparts. The choice to outsource depends on a range of factors, not least of which is the ability and/or willingness of a third party to report on a trading firm´s behalf. A major issue is whether this counterpart possesses all the information required to report “on behalf”. Trading platforms or counterparts, for instance, have an incomplete set of data and the corporate would be required to complete that set. This may include potentially sensitive information, such as end beneficiary data or exposure valuation details. Completing the data requires additional information flows possibly negating the operational streamlining delegation should deliver. Another aspect is a firm´s ability to delegate the reporting of their intragroup and cross-border trades, which are not typically captured by a single counterpart. So, while delegation may appear attractive a detailed benefit analysis should be undertaken. What about reconciliation? As the firm retains full responsibility for what has been reported it is vital they maintain a complete overview. TRs should provide real-time individual trade reporting status reports as well as regular end-of period reports recapturing aggregate positions and transaction details at the end of the day, week or month. An archiving system, maintaining full reporting details for a period of 10 years, should complement this. A TR should also enable systematic reconciliation with trades lodged by counterparts, whether with them or another authorised TR. Finally, links should be offered to providers to facilitate regular portfolio reconciliation exercises as mandated under EMIR. What needs to be reported? Reporting directly to a TR can be relatively straight forward with the required data extracted from the treasury management systems – some 30 data fields for forex swap - including both counterparty and common data (primary economic terms). In addition, each reporting counterparty and transaction requires a Legal Entity Identifier (LEI) and Unique Trade Identifier (UTI). LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE — N°83 — OCT The European Market Infrastructure Regulation (EMIR) has been in force since 16 August 2012. But do you really understand the implications this EU-wide regulation means to your organisation? Whatever your size the reporting obligation is one element of EMIR all firms will need to comply with from January 2014 when OTC derivative trades become reportable. Many treasurers still believe their bank will, on their behalf, undertake the regulatory obligations for all their derivative transactions, including reporting to a trade repository (TR). While some banks indicate they will offer such services, many will not. And what makes the reporting obligation difficult to outsource is the necessity to report both market-facing transactions and intragroup transactions. However the reporting is done, ultimately the corporate retains full responsibility and liability for what is reported to the European regulators. / NOV / DEC 2013 What Reporting does it mean under EMIR to you? 27

Table des matières de la publication Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013

Couverture
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David White - TriOptima
FOCUS
FORUM
CORPORATE FINANCE
15 MINUTES WITH Capita Asset Services - Luxembourg
NEWS
THE FINANCIAL RISK OBSERVATORY

Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013