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Derivatives Update - Reporting deadline for back-loaded trades

AUTHOR(S): Christian Donagh, Chris Quinn, Patrick Molloy, Turlough Galvin, Alan Keating, Mark O’Sullivan, Gerry Thornton
PRACTICE AREA GROUP: Structured Finance and Derivatives
DATE: 23.01.2014

European regulators have recently clarified that the start date for trade reporting of derivatives entered into on or after 16 August 2012, and which are still outstanding on 12 February 2014 (“Post-EMIR Outstanding Contracts”) under the European Markets Infrastructure Regulation ("EMIR") is 12 February 2014.

The derivatives industry had commonly understood that such trades would benefit from a 90 day grace period, meaning the deadline for reporting would have been 5 May 2014.  This understanding had even been confirmed on the UK Financial Conduct Authority's website.  The Central Bank of Ireland has not yet been appointed as the EMIR competent authority in Ireland, and no official Irish regulatory guidance had been available on this point.

The European Securities and Markets Authority (“ESMA”) has, in recent weeks, clarified that Post-EMIR Outstanding Contracts will not benefit from any grace period.  A spokesman for ESMA told the industry publication Risk.net:

“The 90-day delay envisaged in the implementing of technical standards was only applicable to trades that were outstanding on August 16, 2012 and are still outstanding on the reporting start date. There is no delay foreseen in the regulations for trades that were executed [on or] after August 16, 2012 and are still outstanding on February 12, 2014.”

Reporting Deadlines

Following the recent clarifications, the deadlines for reporting of back-loaded derivatives trades are:

  • 12 February 2014 for trades entered into on or after 16 August 2012 which are still outstanding on 12 February 2014
  • 5 May 2014 for trades entered into before 16 August 2012 which are still outstanding on 12 February 2014
  • 12 February 2017 for trades terminated between 16 August 2012 and 12 February 2014.

If you would like more information or advice in relation to this matter, please get in touch with your usual Structured Finance and Derivatives Group contact.

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