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Buy-side perspective: Changes to EMIR reporting requirements come into force on 18 June 2020

Buy-side perspective: Changes to EMIR reporting requirements come into force on 18 June 2020
  • United Kingdom
  • Financial services and markets regulation - Derivatives
  • Financial services - Asset managers and funds


On 18 June 2020, changes to the reporting obligations under European Market Infrastructure Regulation (“EMIR”)[1] will come into force. The changes were introduced by Regulation (EU) No 2019/834 amending EMIR (the “EMIR Refit Regulation”) and will shift regulatory responsibility for reporting OTC derivatives contacts from funds and pension schemes to those that manage them.

For more information regarding the EMIR Refit Regulation please see our previous briefing, ‘Buy-side perspective: Final EMIR Refit text published’.

Changes to the responsibility for reporting

Managers of in-scope investment funds and pension schemes will face an increased regulatory burden in respect of OTC derivatives contracts. The manager will be responsible and legally liable for reporting obligations on behalf of the fund or pension scheme and will need to ensure accuracy of the details which are reported. We have summarised the revised position below.

Responsible for reporting prior to 18 June 2020

Responsible for reporting from 18 June 2020

Undertakings for collective in transferable securities (“UCITS”)

The management company of the UCITS (the “ManCo”)

Alternative Investment Funds (“AIF”)

The AIF manager (the “AIFM”)

Institution for Occupational Retirement Provision (“IORP”)

The authorised entity which manages and acts for the IORP

Scope of changes

The revised reporting obligations apply to OTC derivatives contracts only. The reporting requirements as they apply to exchange-traded derivatives are there not affected. In-scope funds and pension schemes will therefore continue to be responsible and legally liable for reporting exchange-traded derivatives after the changes take effect on 18 June 2020.

Action required 

Fund and pension scheme managers affected by the changes should review the delegated reporting arrangements currently in place with any reporting delegates (including investment managers and counterparties) in order to ensure that the delegation arrangements reflect the new requirements. Contractual arrangements may also need to be revised to take into account the different position in relation to reporting of exchange-traded derivatives.

On 19 December 2019, the International Swaps and Derivatives Association Inc. (“ISDA”) together with various industry bodies published the Master Regulatory Reporting Agreement (“MRRA”). The MRRA provides parties with a template universal reporting agreement which covers the reporting obligations under both EMIR (as amended by EMIR Refit Regulation) and the Securities Financing Transaction Regulation. 

ManCos and AIFMs affected by the changes should also consider whether the outsourcing requirements apply to reporting delegation arrangements. In the UK, the Senior Management Arrangements, Systems and Controls Sourcebook (“SYSC”) outsourcing rules will apply to  ManCos and AIFMs authorised under the Financial Services and Markets Act 2000. Under Rule 8 of SYSC, where a firm delegates reporting responsibilities, it will need to take reasonable steps to avoid any additional operational risks. As a consequence, in-scope fund managers will need to ensure their systems are sufficiently robust in order to comply with the SYSC requirements and any other applicable outsourcing rules.

How can Eversheds Sutherland assist?

Our global derivatives team has been advising clients regarding reporting under EMIR since the requirements were first introduced. As a buy-side focused practice, we have a deep understanding of the requirements of investment funds, investment managers and pension scheme trustees. We are ideally placed to support buy-side firms with changes to their processes and documentation required as a result of the changes to reporting requirements.

[1] Regulation (EU) No 648/2012 of European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.