EMIR Refit: Top 5 Challenges for Regulated Firms
Key Takeaways
- Change Volume: EMIR Refit significantly expands the field set, forcing firms to absorb new data requirements while withdrawing and amending existing elements.
- Reconciliation Burden: The increase from 56 to 149 reconcilable fields by 2026 materially raises the complexity of post-submission matching and exception handling.
- Identifier Coordination: UTI generation and sharing become more operationally demanding where trades span jurisdictions, counterparties, and multiple time zones operationally.
- Technology Shift: Moving from CSV toward XML introduces larger files and new processing requirements that affect both infrastructure and operational readiness.
- Dual-Standard Challenge: Staggered UK and EU go-live dates force some firms to support two EMIR data standards simultaneously for several months.
EMIR Refit increases reporting scope, introduces new XML workflows and expands reconciliation requirements. This article outlines the five immediate operational challenges firms face and the practical controls needed to maintain reporting accuracy and audit readiness.
The European Market Infrastructure Regulation (EMIR) has undergone significant changes with the introduction of EMIR Refit, presenting implications for regulated firms. Here are the top five immediate challenges faced by firms:
1) An Extensive Number of New Fields
The data fields in EMIR Refit are set to undergo substantial changes, incorporating 89 new fields, withdrawing 15, and updating existing ones. The influx of additional fields, coupled with the necessity to create XML submissions, will result in the submission of sizable files to regulators.
2) Increased Trade Reconciliation Fields and Published Tolerance Levels
The number of reconcilable fields has expanded and is being introduced incrementally to ease the burden on firms. By 2026, two years post EMIR Refit launch, there will be 149 fields for reconciliation, a significant increase from the current 56 in EMIR.
Fortunately, EMIR Refit guidelines clearly outline reconcilable fields, tolerance levels, and start dates for reconciliation. The regulations aim to enhance matching and pairing rates by reducing ambiguity in field definitions, with increased precision rates for numeric values and rounding guidance.
3) UTI
EMIR Refit aligns with international standards and global harmonisation in reporting. The regulations establish Unique Trade Identifier (UTI) generation logic and timelines for sharing the UTI. The responsibility for generating the UTI depends on transaction type and counterparties. Understanding UTI generation, dissemination, and increased counterparty communication is crucial, particularly for transactions spanning jurisdictions and time zones.
4) CSV to XML
The shift to XML-formatted files aligns with global harmonisation objectives and data quality improvement. While XML files may be larger and take longer to generate compared to CSV files, the enhanced data quality justifies this technological transition.
5) Staggered GO LIVE dates between ESMA and the FCA
Firms obligated under both ESMA and FCA must maintain two different data standards for four months. They may also need to report the same trade to two different versions of the EMIR regime. Regulators emphasise that reporting EMIR Refit cannot commence until the specified Go Live dates: 29 April 2024 (ESMA) and 30 September 2024 (FCA). This introduces complexity, and firms must proactively plan to address this challenge.
In navigating these challenges, firms should prioritize understanding the nuances of EMIR Refit, implementing robust systems and processes, and fostering effective communication with regulators to ensure compliance during this transitional period.
How Qomply can help
Qomply’s Regulatory Reporting Hub combines regulatory expertise with AI, automation and data analytics to deliver scalable, audit-ready reporting intelligence that reduces errors, lowers remediation costs, and minimises operational and regulatory risk.
Covering regimes including MiFIR, EMIR Refit, SFTR, CFTC, CSA, MAS, ASIC and HKMA, Qomply also offers a fully managed service and operates globally from London.
Frequently asked questions
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The article lists new fields, expanded reconciliation requirements, UTI generation and sharing, the CSV-to-XML transition, and staggered ESMA-FCA go-live dates. It presents these as the five immediate operational challenges firms need to solve.
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The article says EMIR Refit introduces 89 new fields, withdraws 15, and updates existing fields. It uses those figures to show the scale of the change for reporting teams.
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It says the number of reconcilable fields will grow from 56 to 149 by 2026. The article also notes that the guidelines set out reconcilable fields, tolerance levels, and phased start dates.
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They are a challenge because firms may need to maintain two different data standards and potentially report the same trade to two different versions of the regime for four months. The article gives 29 April 2024 for ESMA and 30 September 2024 for the FCA.
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They should understand the detailed regime changes, implement stronger systems and processes, and communicate effectively with regulators and counterparties. The article says proactive planning is essential for compliance and audit readiness during transition.