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Ten years after the entry into force of the EMIR reporting obligation, national competent authorities (NCAs) across the EU still rate the overall quality of the EMIR transaction reports as poor. It is for this reason that it was decided to adjust the related legal framework through a framework reform, which is known as EMIR Refit. While the scope of the reporting obligation has already been subject to modifications in the past, EMIR Refit constitutes the greatest change to the EMIR reporting framework since its inception, as all concerned market participants will now face stricter rules.
See below for a short recap of the upcoming changes under the EMIR Refit regime and the risks of non-compliance.
Who is concerned?
The EMIR Refit will affect all EU entities that are subject to the reporting obligation under EMIR, thus, in principle, all EU entities dealing with derivatives (whether for hedging, speculation, or any other purpose).
What are the main changes?
The main changes are the following:
- a standardised reporting format must be used.
- a significantly increased number of reporting fields must be addressed.
- a new obligation to notify the relevant NCA in the event of reporting issues.
What is the timeline?
The new regime under the EMIR Refit framework will apply as from 29 April 2024.
What are the risks of non-compliance?
The CSSF has announced the application of a stricter supervisory approach regarding EMIR. To this extent, it has set out its expectations regarding the new reporting standards in its guidance on EMIR Refit reporting standards and clearly states that any failure to report accurately as from 29 April 2024 will be considered non-compliance with Article 9 of EMIR on reporting obligations. We expect the risk of sanctions for EMIR breaches to increase significantly.
How we can help
Arendt has a dedicated team that can assist with all legal and regulatory matters in this area.