On 20 February 2019, the Central Bank of Ireland (“Central Bank”) wrote to counterparties to provide feedback on the main issues identified from the European Market Infrastructure Regulation (“EMIR”) data quality work undertaken by the Central Bank in 2018.
The Central Bank identified a number of issues which it says raise particular concerns given their potential to hinder the objectives of EMIR, namely, increased transparency, reduced counterparty risk and reduced operational risk. The letter notes that counterparties should include compliance with EMIR reporting as a standing agenda item for all board meetings. The recommendations set out in the Central Bank’s letter are summarised below.
Counterparties should:
- receive regular reports from their delegates, to include details of trade repository rejection reports. This requirement should be included in any delegated reporting agreement entered into by a counterparty;
- reconcile data reporting to the trade repository by its delegate with its own internal systems to ensure that all relevant trading has been reported;
- ensure that remedial action is undertaken to address shortfalls and non-compliance with EMIR requirements; and
- regularly review trade repository rejection reports to ensure that all trade submissions are successfully reported to a trade repository, revised correct data submissions are made on a timely basis and remedial action is taken to eliminate rejected reports in the future.
The letter also sets out the Central Bank’s recommendations with regard to the accuracy and completeness of trade reporting, legal entity identifiers and unique trade identifiers.