European Regulator Fines Major Trade Repository for EMIR Breaches

Author

Matt Chapman, Charlotte Longman

Publish Date

Type

Compliance Alert

Topics

  • Compliance
  • Trade & Transaction
  • Regulatory Technology

The EU’s securities markets regulator, European Securities and Markets Authority (ESMA), recently fined a major trade repository €238,500 for eight breaches of the European Market Infrastructure Regulation (EMIR). The fined firm had the third largest market share (based on the number of reports received, clients and revenues) in the European Union.

The regulator considered the breaches as negligence, with the fine pointing to failures in ensuring the integrity of data and providing direct and immediate access to regulators.  Anneli Tuominen, Interim Chair, ESMA, said that this action “emphasises the importance ESMA places on trade repositories complying with their obligations on data integrity and regulatory access.”

“The provision of timely and accurate data to CCP and derivatives markets supervisors is an essential requirement in facilitating the monitoring and identification of systemic risk in EU derivatives markets.” 

Although some firms continue to treat EMIR transaction reporting as a low priority, this fine reiterates the systemically significant role that it plays. Coming on the back of significant concerns about data quality, in particular in the delegated reporting space, a requirement for Senior Managers to take explicit responsibility for that data quality, and the forthcoming REFIT changes, it is clear that EMIR remains a regulatory priority. As a result, we expect regulatory attention on data quality and timeliness to continue to increase in the next 12-24 months. 

But worryingly, analysis of firms using ACA’s award winning Regulatory Reporting Monitoring & Assurance (ARRMA) service reveals that many firms will fall foul of regulatory inspection, with:

  • 97% of firms reviewed currently reporting incorrectly; and
  • on average 30 separate error types affecting the quality of reports. 

Our guidance

This is a potential indication of a widespread misunderstanding of how certain reporting requirements apply to firms and their activities, particularly when reporting arrangements and investment activities change. It’s vital that firms review the quality of their reporting, including where it is being delegated, to be sure it meets regulatory expectations. 

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Click here to book a free transaction reporting review to help identify problems in your regulatory reporting before the regulator does. This includes a summary report identifying, among other things, the percentage of reports submitted that include an error and the number and type of errors affecting those reports. 

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Questions

Our transaction reporting specialists are on hand should you have any questions about this fine or if you need help in identifying failings in the completeness, accuracy, and timeliness of your trade and transaction reports.  

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