As 2024 unfolds, derivatives market participants are facing significant regulatory reporting changes that will impact their operations. Among the most prominent are the EMIR REFIT regulations in the EU and UK, CFTC phase 2 in US, JFSA in Japan, MAS in Singapore, and the ASIC Derivatives Transaction Reporting (DTR) rewrite in Australia. These updates are designed to enhance transparency, improve data quality, and align with international standards. However, the implementation of these regulations demands that firms take proactive steps to ensure compliance.  

Lessons learned from EMIR REFITEU Implementation

The go-live of the EMIR REFIT in the EU on April 29, 2024 provides valuable insights for firms preparing for the UK implementation and other upcoming regulatory changes. Here are some key lessons learned:  

1. Early engagement is critical: Firms that engaged with regulators, trade repositories, and industry groups well in advance of the go-live date were better prepared to manage the transition. Early communication helped clarify requirements, address ambiguities, and allowed time for thorough testing.  
2. Data quality challenges: Despite significant preparation, many firms encountered challenges related to data quality. The expanded data fields and stricter validation rules required enhanced data governance and more rigorous checks to ensure the accuracy and completeness of reports. Firms learned the importance of investing in data quality initiatives and conducting multiple rounds of testing to identify and correct errors.  
3. System readiness and flexibility: The implementation revealed the need for systems that are not only compliant but also flexible. Firms that had invested in adaptable technology platforms found it easier to integrate the new ISO 20022 messaging standards. This flexibility also allowed for quicker adjustments in response to unforeseen issues.  
4. Training and change management: Successful implementation required more than just technical readiness. Firms that invested in comprehensive training and change management programs saw smoother transitions. Ensuring that staff understood the new requirements and were comfortable with updated processes was crucial in minimizing disruptions. 

ASIC Rewrite: What you need to know

Australia’s derivatives market participants are also facing significant regulatory changes with the Australian Securities and Investments Commission (ASIC) rewriting its Derivatives Transaction Reporting (DTR) rules. The rewrite, effective from October 21, 2024, aims to enhance the consistency and accuracy of derivatives reporting in line with global standards, particularly the CPMI-IOSCO standards for OTC derivatives.  

Key changes in ASIC DTR rewrite:  

1. Expanded reporting fields: The ASIC rewrite introduces new data fields and modifies existing ones, requiring firms to provide more detailed information in their reports.  
2. Harmonization with international standards: The changes align ASIC’s reporting framework with international standards, particularly those set by CPMI-IOSCO, to facilitate cross-border data sharing and reduce discrepancies between jurisdictions.  
3. Enhanced data quality requirements: ASIC is placing greater emphasis on the accuracy and completeness of data, with stricter validation rules and increased scrutiny on the quality of reported data.  

How to prepare for EMIR REFIT (UK) and ASIC rewrite go-live

With the UK’s EMIR REFIT set to go live at the end of September 2024 and ASIC on October 21, companies operating within these regulations must take immediate action to ensure compliance:  

1. Review and update reporting processes: Firms should conduct a thorough review of their current reporting processes and identify areas where changes are needed to align with the new requirements. This may involve updating internal systems, data management processes, and ensuring compatibility with ISO 20022 standards.  
2. Engage with trade repositories: It’s crucial to engage with trade repositories to understand how they are implementing the changes and to ensure your firm is fully onboard and you will have access to all reports after go-live.  
3. Assess delegated reporting arrangements: If your firm relies on delegated reporting, confirm that your counterparties or third-party service providers are prepared to meet the new requirements. Establish clear communication channels to manage any potential issues.  
4. Training and awareness: Ensure that your compliance and reporting teams are fully trained on the new requirements. This includes understanding the expanded data fields and revised deadlines.  
5. Testing and validation: Before the go-live date, conduct extensive testing of your updated reporting processes to identify and rectify any issues. Early engagement with regulators and trade repositories during this testing phase can help ensure a smooth transition.  

The regulatory landscape for derivatives reporting is undergoing significant changes in 2024, with the EMIR REFIT in the EU and UK, and the ASIC rewrite in Australia. Firms must take proactive steps to update their reporting processes, engage with trade repositories and regulators, and ensure their teams are well-prepared for these changes. By starting preparations early, conducting thorough testing, and maintaining clear communication with all stakeholders, firms can achieve a smooth transition and maintain compliance with these new regulatory requirements. 

SimCorp is committed to supporting our clients through these transitions. We have successfully assisted our clients in navigating the complex requirements of the EMIR REFIT in the EU, ensuring a smooth and compliant implementation. As the EMIR REFIT UK and ASIC deadlines approach, SimCorp will continue to provide the expertise, tools, and support necessary to help our clients meet their regulatory obligations with confidence. By partnering with us, firms can be assured of a successful transition and sustained compliance in the evolving regulatory environment.