Emir Reporting Services Agreement: What You Need to Know
The European Market Infrastructure Regulation (EMIR) was introduced in 2012 to increase transparency and reduce risk in the derivatives market. As a result, firms that trade in over-the-counter (OTC) derivatives are required to report their trades to a registered trade repository.
To comply with EMIR reporting requirements, many firms turn to third-party service providers who offer EMIR reporting services. These providers, also known as trade repositories or reporting entities, are responsible for collecting and disseminating the required data on behalf of the firms.
When engaging with an EMIR reporting services provider, it is important to have a clear understanding of the terms and conditions of the agreement. This is where the EMIR reporting services agreement comes into play.
What is an EMIR Reporting Services Agreement?
An EMIR reporting services agreement is a contract between a firm and a reporting entity that outlines the terms of the EMIR reporting services provided. It sets out the obligations and responsibilities of each party, as well as the fees and charges associated with the services.
The agreement typically covers the following areas:
1. Scope of services: This outlines the specific EMIR reporting services that the reporting entity will provide, including the type of trades to be reported, the frequency of reporting, and the format of the data.
2. Timelines and deadlines: This sets out the deadlines for reporting trades to the trade repository, as well as the timelines for correcting any errors or omissions in the reported data.
3. Obligations and responsibilities: This outlines the obligations and responsibilities of each party, including data accuracy, confidentiality, and compliance with applicable laws and regulations.
4. Fees and charges: This outlines the fees and charges associated with the EMIR reporting services provided by the reporting entity. These may include one-time setup fees, ongoing service fees, and penalties for non-compliance.
5. Termination and dispute resolution: This sets out the procedures for terminating the agreement, as well as the mechanisms for resolving any disputes that may arise between the parties.
Why is an EMIR Reporting Services Agreement important?
Having a clear and well-defined EMIR reporting services agreement is important for several reasons:
1. Compliance: The agreement ensures that the firm is compliant with EMIR reporting requirements and that the reporting entity is fulfilling its obligations as a registered trade repository.
2. Clarity: The agreement provides clarity and transparency on the scope of services, timelines, fees and charges, and obligations and responsibilities of each party.
3. Legal protection: The agreement provides legal protection for both parties in case of any disputes or breaches of contract.
4. Risk management: The agreement helps to manage the risks associated with EMIR reporting, including errors, omissions, and non-compliance.
In conclusion, the EMIR reporting services agreement is a crucial component of compliance for firms that trade in OTC derivatives. It ensures that both parties understand their obligations and responsibilities, and provides legal protection and risk management. As such, it is important to engage with a reputable reporting entity and to carefully review and negotiate the terms of the agreement.