07 March 2014

EACT publishes letter to Commissioner Barnier on EMIR

Immediately before the EMIR reporting start date of 12 February, EACT sent a letter to Commissioner Barnier stressing the numerous difficulties faced by non-financial counterparties in implementing the EMIR reporting obligation.

Translated from the French

EMIR imposes a tight time frame for reporting obligations - only 90 days from the approval of the first trade repositories until the beginning of the reporting obligation. Over the last few months the community of European treasurers gradually realised that the implementation of EMIR reporting would raise many problems, not all of which are identifiable at the outset. We assure you that the non-financial companies we represent will make every effort to comply with the legislation's time frames. Nevertheless, we hope that the competent national authorities for surveillance in Member States adopt a flexible and pragmatic attitude in the first months of EMIR's implementation.

Further points raised in more detail:

1. ESMA has not provided their guidelines on Trade Unique Identifiers (TUI) in good time, which has led to a lack of standardisation between banks and, on the side of non-financial corporations, to inefficiencies and frustration.
2. For a variety of reasons, trade repositories are behind in various aspects, including user testing which only started recently. It seems to us that the very short deadlines imposed by the legislation were not sufficient to complete the preparations of various market players.
3. Whether by ESMA or trade repositories, very little attention has been given to the reporting of intra-group transactions, for which non-financial companies cannot rely on banks. The contribution of reporting to the reduction of systemic risk has always been questionable and there is a considerable administrative burden on non-financial corporations.
4. Without going into detail, there were a number of differing interpretations of national regulators. These differences were a factor of uncertainty, and even dissension in non-financial multinational corporations. 

It is vital that the importance of EMIR reporting by non-financial corporations is finally recognised by ESMA, that clear guidelines are given where they are needed, and that, like the British FCA, the insurance companies are assured that there will be no prosecution of non-financial companies that are not in compliance with the legislation on 12 February. Prosecution would have devastating effects both on the image of Europe and on the implementation of EMIR.

Full letter (in French) 

© EACT