Companies that must comply with reporting obligations for OTC derivative transactions have been told that there’s no excuse for not being ready by the time the February start date comes round.
Speaking at an ACT webinar event on 21 November, Barry King, a technical specialist in OTC derivatives and post trade policy at the Financial Conduct Authority, said: “It will not be acceptable for firms to have not made efforts to be compliant by 12 February.”
Under the European Market Infrastructure Regulation (EMIR), all financial and non-financial companies that use exchange-traded derivatives and OTC derivatives must report those trades to a trade repository from 12 February.
But many companies have been slow to prepare for EMIR, partly as a result of the confusion and uncertainty that has surrounded the implementation of the new rules. The European Securities and Markets Authority has already delayed the start date for mandatory reporting of OTC derivatives once, while the first trade repositories were not approved until earlier this month.
Daniel Corrigan, from futures exchange company CME Group, warned that a ‘wait and see approach’ could catch up with companies in the end, however, as they are likely to get caught up in a “mad rush at the end” to secure legal entity identifiers (LEIs). These are unique reference codes that identify the legal entities involved in financial transactions.
Every legal entity within a group that is engaged in financial transactions must have its own LEI, but so far fewer than 1,000 LEIs have been requested, Corrigan said.
Sally Percy is editor of The Treasurer
To listen to the webinar in full, please visit www.treasurers.org/emircountdown