Our Response to the ESMA Consultation

We recently responded to the European Securities and Markets Authority (ESMA) Consultation Paper on a “Review of the technical standards on reporting under Article 9 of EMIR”.

This consultation is on the revision of the Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) of EMIR which deal with the obligation of Counterparties and CCPs to report to trade repositories. The practical implementation of EMIR reporting showed some shortcomings and highlighted particular instances for improvements and the ESMA consultation seeks feedback on its proposed revised standards.

The complete ESMA consultation document can be found on this page.


Clarus Response

The main part of our response dealt with the question of “improving the data quality of reports“.

In our view the most effective way to improve data quality is to “increase the uses and users of trade reporting data“.

This could be done by improving the state of publication dissemination in Europe, which currently is far from timely and aggregated to such a high-level that it is largely meaningless. (See my blog EMIR Trade Reporting and Public Data).

Changing to a regime where public dissemination is at a granular trade level and intra-day is the ideal.

This is the current state in the US under the CFTC Dodd-Frank regulations.

Consequently there are a great many uses and users of the US data. Our SDRView product is widely used by those interested in the information gleaned from this data and we know that other Vendors and In-House Systems also utilise the public dissemination feeds. This serves to improve transparency and provide feedback to improve the upstream reporting process.

We believe that the existing investment and implementation experience gained by Trade Repositories and Global Banks in the US, could be leveraged in Europe. Doing so would “increase the uses and users of this data”, which would then provide both feedback and an incentive to improve data quality.

Our response will in due course be published on the ESMA site. It is also available at ClarusFT Response to ESMA Consultation.


Full Disclosure

In the interests of full disclosure, I should make clear that Clarus stands to gain from improved European public dissemination. However I do not apologise for that as in our world, companies compete and act in their own self-interest. We all understand and expect that.

However in this case, there would be far greater benefits to the industry as a whole.

Trade reporting has necessitated millions of dollars and euros of spending with the data simply disappearing into Trade Repositories.

As such it just seems to represent a tax or overhead of being in the Derivatives business.

However if data flowed out of the Trade Repositories, the resulting gains in transparency, price discovery, competition and confidence would benefit the market at large.

That would be a desirable outcome and a worthwhile investment.



I look forward to reading other industry responses to the ESMA Consultation and even more the resulting ESMA actions.

Even if it means getting my head around complicated regulatory language and jargon. (What is RTS again?).


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