On July 8th, ESMA published three sets of revised Q&As covering specific aspects of EMIR, MiFID II, and MiFIR data reporting and transparency. The revisions take immediate effect.
Regarding EMIR, ESMA’s updates focus on practical questions regarding Article 9 data reporting deadline issues involving the definition of ‘working day’ where two counterparties are in different Member States.
Specifically, the answer to Q&A 11(b) clarifies that the counterparties should follow their local time and the relevant calendar of their Member State to specify the definition of “working day” in the context of determining the deadline for reporting under EMIR. ESMA states that this clarification should be applied even if the two counterparties to the same derivative follow different calendars and/or are located in different timezones. For the avoidance of doubt, it means that each counterparty should follow its own Member State local calendar and use the local time to determine the deadline for reporting.
Not mentioned explicitly in the Q&A, but noted by various commentators including ourselves at deltaconX, is the observation that where counterparty X based on one country delegates its reporting to counterparty Y in another country, it is not clear whose definition of ‘working day’ should be used.
Regarding MiFIR data reporting, the new Q&A provides clarifications in relation to the reporting requirements for submission of transaction reports under Art. 26 of MiFIR and RTS 22. In particular, the new Q&A provides two reporting scenarios where an Investment Firm executes a transaction through an execution algorithm provided by another Firm.
Readers are aware that MiFIR (and MiFID II) impose many obligations on firms using algorithmic trading techniques, so additional reporting scenarios on this topic are very welcome.
Regarding MiFID II & MiFIR transparency, the new Q&A provides technical clarifications for the performance of the mandatory systematic internaliser (SI) test. The Q&A specifies how the number of transactions and the nominal amount traded of a derivative shall be allocated when a derivative contract changes over the observation period from one sub-class to another. ESMA is very keen that this mandatory test is performed correctly.
Please contact our Compliance Help Desk if you require any further information on EMIR, MiFID and MiFIR data reporting and transparency, and require further guidance on your reporting obligations.