Summary of CySEC's Circular C545
Memo #02-2023
CySEC Circular No: C545
Date: 13/01/2023
Subject: Publication of CySEC’s reviews of compliance with the reporting obligation in accordance with article 9 of Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories, as amended (‘EMIR’)
Purpose: To inform Regulated Entities for the CySEC's observations following a review on the quality of data reported to Trade Repositories under Article 9(1) of EMIR by Regulated Entities.
In Summary:
CySEC has issued the Circular C545 on 12/01/2023 to inform the Cyprus Investment Firms (‘CIFs’), UCITS and Management Companies, Alternative Investment Funds managed by AIFMs and Non-Financial Counterparties, for the CySEC's observations, following a series of reviews that recently carried out by CySEC, on the quality of data reported to Trade Repositories, under Article 9(1) of EMIR by Regulated Entities (‘the Reviews’).
According to Circular C545, the purpose of the Reviews was to assess the quality of data reported by Regulated Entities to Trade Repositories and whether the data was reported within the timeframe provided in EMIR.
CySEC’s Reviews identified areas of concern that CySEC wishes to highlight to all Regulated Entities. This Circular C545 sets out CySEC’s observations and asks all Regulated Entities to consider whether they comply with their EMIR reporting obligation.
CySEC informs that, in total, 40 Reviews were carried out, during the period 2021 until August 2022, which assessed the reconciliation, completeness, accuracy and timeliness of data reported by Regulated Entities to Trade Repositories.
This Circular C545 refers to the areas of concern/observations identified that includes:
1) Misreporting of details of derivatives contracts
2) Incorrect status of derivative contracts
3) Collateralisation
4) Definition of “working day” for the purpose of determining the deadline for reporting
5) Rejections – Delegation of Reporting
6) Reconciliation of reports
7) Use of valid legal entity identifiers for counterparties that are legal entities
CySEC notes that Regulated Entities should regularly review the procedures established, implemented and maintained, in relation to EMIR reporting with the aim to ensure that the data reported to Trade Repositories are complete, accurate, consistent, timely and not duplicated.
CySEC further notes that Regulated Entities not complying with their EMIR reporting obligation will be subject to enforcement action.
The Article 9(1) of Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories, as amended (‘EMIR’) provides that: “Counterparties and CCPs shall ensure that the details of any derivative contract they have concluded and of any modification or termination of the contract are reported in accordance with paragraphs 1a to 1f of this Article to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than the working day following the conclusion, modification or termination of the contract.”
Read the CySEC Circular C545
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