Key Changes You Need to Know About the EMIR Refit Technical Standards Effective from 29 April 2024

In recent years, ESMA has been actively engaged in the development of global guidance on the harmonisation of data elements reported to trade repositories, from the initial ESMA consultation to the Final Report in 2020. On 7 October 2022, the European Parliament and Council approved a set of Technical Standards stemming from the EMIR REFIT. Effective on 29 April 2024, the EMIR Refit has introduced several changes and amendments to the standards and requirements set out in EMIR. These changes inter alia include:

1. New ISO 20022 XML Data Format

EMIR Refit requires that XML schemas developed in line with ISO 20022 methodology are used not only for the communication between the TRs and authorities, but also for reporting from TR counterparties. A fully standardised format for reporting will eliminate the risk of discrepancies due to inconsistent data. 

2. Introduction of Unique Product Identifier

ESMA has specified that derivatives which are admitted to trading or traded on a trading venue or a systematic internaliser should be using an International Securities Identification Number (ISIN) code. The remaining derivatives should be identified using a Unique Product Identifier (UPI) code.

The Derivatives Service Bureau (DSB) Ltd has been designated as the service provider for the future UPI system. DSB will be the sole issuer of UPI codes and operator of the UPI reference data library.

A UPI will be assigned to an over-the-counter (OTC) derivatives product and used for identifying the product in transaction reporting data. This will enable authorities to aggregate data on OTC derivatives transactions by product or by any UPI reference data element. Such aggregation will facilitate the effective use of OTC trade reporting data, including helping authorities assess systemic risk and detect market abuse.

3. Data Fields Changes

With EMIR Refit, reportable fields will increase from 129 to 203, including 174 reporting fields and 29 for collateral/margin data. Among them, 41% are newly introduced fields, 19% are existing fields being updated, 105 are Common Data Element fields, moving close to international data harmonization.

The entities falling within the scope of EMIR which are impacted by these technical standards are required to comply to such changes by 29 April 2024. At which point firms will then need to report details on their derivative transactions under the new standards and start upgrading outstanding derivatives to this new format.