EMIR Trade Repository Switching
The transaction reporting requirements of the European Market Infrastructure Regulation (EMIR) requires that reportable trades and ETD positions be reported no later than T+1 to an ESMA approved trade repository (TR).
At the time of writing, there are five such trade repositories in operation;
- CME Europe
- DTCC Derivatives Repository Ltd (DDRL)
- ICE Trade Vault Europe
- Krajowy Depozyt Papierów Wartościowych (KDPW)
- LSE UnaVista
- Regis TR
Each of these repository services differ slightly in their approach to capturing and validating your trade input data – meaning that more than just being a storage repository for trade data, your choice of repository can have a large impact on your operational processes and regulatory controls.
Furthermore, each trade repository is required by their regulator ESMA to publish a fee schedule, which again will vary between the five players. Some repositories levy their charges based on a per transaction basis, some based on notional volume and others based on an annual membership charge.
Switching, when managed correctly, is likely to result in significant cost savings and potentially much improved technical and operational processes. The key to recognising these gains is to manage the switching process as a discrete piece of work, utilising experience to avoid many common pitfalls.
How We Can Help
One of the operational support services we offer at Belbridge Consulting is the managed switching process from one EMIR TR to another. This will include the initial cost/benefit analysis and the detailed portfolio analysis tasks – to ensure that you have 100% product coverage when switching.
In order to complete the switch-over, we will provide a full reconciliation of the trades to be closed from the source TR, against the trades to be opened with the target TR. This can often prove more complex than it should be, given ESMAs validation rules and the inability to reuse a unique trade identifier (UTI) to report a trade more than once.
We’ll also look at the changes to your operational processes and ensure you have sufficient risk controls in place to ensure your transition is as simple as possible – allowing you to recognise the cost savings and operational benefits, without any unexpected operational burdens.