DTCC outlines how Brexit will affect reporting requirements on either side of the English Channel
by creating new challenges
From the pandemic-driven market volatility to the go-live of Securities Financing Transactions Regulation (SFTR), 2020 has been a year of disruption for the industry. And there’s more to come.
On 31 December, the Brexit transition period will end and the UK will officially leave the EU. At that time reporting obligations imposed by the European Market Infrastructure Regulation (EMIR) will continue to apply in the UK as provided for by the UK-EMIR and UK-SFTR which come into force and impacted firms will need to be ready to manage their derivatives and securities financing trade reporting with the European Securities and Markets Authority (ESMA) in the EU and the UK’s Financial Conduct Authority (FCA) as applicable.
Challenges of two-jurisdiction reporting
Brexit preparation has not been straightforward for market participants. Repeated changes to the calendar forced firms to start and stop their planning several times, in turn forcing them to allocate, then reallocate resources to tackle all the operational and business updates needed to be ready for the divorce.
With that date now fixed and approaching quickly, we see that firms are seeking ways to ease the burdens of transitioning to post-Brexit operations. One such burden is bifurcated trade reporting – that is, reporting trades to two different authorities, one for the EU27 (ESMA) and the other for the UK (FCA). Such an arrangement is not only operationally challenging, it can add unnecessary costs.
A better way – less costly, more efficient – is to utilise an approved trade repository that can operate in both regulatory ecosystems post-transition.
Simplified reporting
DTCC, the industry’s premier post-trade infrastructure, will offer our clients end-to-end trade reporting solutions in both the UK and EU through our Global Trade Repository service (GTR). DTCC Data Repository (Ireland) PLC (DDRIE), based in Dublin, will provide EU27 trade reporting while DTCC Derivatives Repository PLC (DDRL) will serve UK reporting.
With its global reach and multi-product functionality, GTR is a one-stop shop that can enable users to meet their regulatory reporting obligations wherever they are located via a single platform. For both ESMA and FCA-required EMIR and SFTR reporting, DTCC clients will be able to continue sending the same data to the same place over the same connectivity with a service delivered to the same pre-Brexit service level agreements.
For targeted assistance in making the post-Brexit transition, DTCC Consulting Services is also available. Our recently launched consulting offering is designed to help clients take a strategic approach in addressing the numerous regulatory, financial and operational challenges related to their post-trade ecosystems.
