After many delays (and a global pandemic), technical standards for the European Markets Infrastructure Regulation were published in December 2022. This started the clock for EMIR Refit reporting requirements, which have a rapidly approaching effective date in April 2024. Predictably, financial institutions are scrambling to spin up implementation programs and secure resources to implement these significant regulatory changes.
Affected organizations are treating EMIR Refit seriously, but what should be their focus in 2023?
Harmonization with international Critical Data Element standards (one of EMIR Refit’s explicit goals) implies profound changes to the structure and content of reports. At the most basic level, the number of reportable fields under EMIR Refit will increase by more than 50%. Adopting standard fields like UTI and UPI are significant undertakings, as is the transition to ISO 20022 message format. The very scope of what must be reported has expanded with the introduction of new reportable event types, while reconciliation requirements become more rigorous and specific in detail.
Firms must prepare to source extra data fields and introduce new processes to resolve errors and omissions while continuing to improve upstream data quality. They need to obtain the right resources and staff who can be on point to steer the organization through every aspect of complying with the demands of EMIR Refit as the 2024 deadline approaches.
Furthermore, firms must build contingency into their resourcing and work plans to manage the inevitable, unforeseen complexities of a major initiative. In practice, there will be limits to individual bandwidth and internal capacity. It is prudent to integrate outside expertise to manage EMIR Refit demands as smoothly as possible with minimal operational impact.
For example, in-house systems may struggle under the volume of reporting mandated under the new requirements. Technological solutions must be sought that scale horizontally across multiple product lines and systems while being responsive to ongoing change. Establishing a single reliable source of data with associated provenance is the ultimate goal. This in turn is a vital link to generating or validating the subsequent reports and submissions that regulators will require from 2024 to be EMIR Refit friendly.
Faced with finite resources, it is imperative to establish what type of report is required, why, and how it was derived, so that you can confidently and efficiently manage reporting obligations under EMIR Refit. Invaluable to this is having access to auditable records to evidence the logic and data elements that informed the decisioning behind your reporting output.
Of course, these are just a few areas for consideration and focus as we welcome the start of 2023 and the final countdown to EMIR Refit. Therefore don’t hesitate to contact us here and one of our EMIR Refit product experts will be in touch.
There’s still time to beat the clock.