EMIR REFIT Mandatory Reporting provisions require market participants to consider their existing Delegated Reporting arrangements.

Key Points:

..From 18 June 2020, financial counterparties (FCs) will be liable for the timely and accurate reporting of over-the-counter (OTC) derivative contracts on behalf of both themselves and their non-financial counterparties (NFCs) that are not subject to the clearing obligation (NFC-s) (Mandatory Reporting). To enable an FC to report, an NFC- will need to provide to such FC the data that the FC cannot reasonably be expected to possess. Currently the obligation to report applies to both parties, with NFC-s often delegating their reporting obligations to FCs or third parties (Delegated Reporting).

..An NFC- will remain liable to report OTC derivative contracts entered into with a third-country counterparty that would be an FC if it were established in the EU (TCE FC), unless such third-country reporting legal regime has been declared equivalent to EMIR and such TCE FC reports OTC derivative contracts to a trade repository (TR) in accordance with such regime. There is currently no such regime.

..Mandatory Reporting applies only to OTC derivative contracts and NFC-s will remain liable for reporting their exchange traded derivative contracts entered into with an FC, even when an NFC- has delegated such reporting to an FC.

..On 26 March 2020, the European Securities and Market Authority (ESMA) published a consultation paper setting out the arrangements that it proposes to implement in connection with Mandatory Reporting.

..The existing delegated reporting arrangements between NFC- and FC entities will need to be reviewed in light of Mandatory Reporting and the proposals in the consultation paper.

..From 17 June 2019, the EMIR REFIT introduced an exemption for reporting intragroup derivative contracts provided that certain conditions are satisfied.