EMIR REFIT Reporting

EMIR REFIT: simplifying reporting obligations for NFC- counterparties

The European Commission's Regulatory Fitness and Performance programme in 2016 (“REFIT”), assessed the existing requirements under EMIR to determine whether they could be simplified and whether certain compliance costs that were considered disproportionate could be eliminated.

This has led to the preparation of a new Regulation (“EMIR REFIT”) that directly amends certain provisions of the existing EMIR Regulation, including reporting obligations.

From 18 June 2020, Financial Counterparties (FC) will be responsible for the reporting of in-scope OTC derivatives contracts with their NFC- counterparties.

Under the current rules, as a Non-Financial Counterparty below the EMIR clearing threshold or “NFC-“, you have been required to report all in-scope Over-The Counter (OTC) derivatives contracts to a Trade Repository.

From 18 June 2020, HSBC will be responsible for the reporting of in-scope OTC contracts where you are trading directly with HSBC and will report the part of the trade that has been transferred to us to be cleared through us. This obligation covers both new trades and reportable lifecycle events for trades that were executed prior to 18 June 2020.

What if you are using HSBC’s EMIR Delegated Reporting Service (DRS)?

Unless you notify us by 15 June 2020 that you intend to report your in-scope trades yourselves, we will start reporting your OTC trades with HSBC entities in Europe on your behalf from 18 June 2020.

You can email such notification at regulatory.business.support.europe@hsbc.com.

HSBC will report in-scope trades through DTCC, the authorised Trade Repository we have been using in conjunction with our Delegated Reporting Service, and will generate a Unique Trade Identifier (UTI) for each reportable trade.

We will therefore terminate our EMIR Delegated Reporting Service (DRS) for OTC trades with HSBC entities in Europe on 18 June 2020. Clients will nevertheless retain the ability to view their reported trades on the EMIR DRS ePortal, available via HSBCnet.

The new mandatory reporting rules only apply to your OTC trades with HSBC entities in Europe. You can continue to delegate your reporting obligations to HSBC for your reportable trades with HSBC Bank USA and your ETD trades with HSBC entities in Europe.

Your HSBC Delegated Reporting Service will still cover these trades.

What if you are currently reporting your in-scope trades yourselves via DTCC?

Unless you notify us by 15 June at regulatory.business.support.europe@hsbc.com that you intend to continue to report your in-scope trades yourselves, we will start reporting them on your behalf from 18 June 2020 through the Depository Trust & Clearing Corporation (DTCC) and will generate a Unique Trade Identifier (UTI) for each reportable trade. You will be able to view your reported trades via the DTCC web portal, provided you register with DTCC.

We will also need you to provide us with the following information when relevant:

  • Any change to your LEI. As you know, every trading entity has the obligation to obtain and maintain a Legal Entity Identifier (LEI). We cannot successfully report a trade without a valid LEI for your entity.
  • Notification of any change to your EMIR classification, as our EMIR REFIT reporting obligation only apply to trades with NFC- counterparties; and
  • From time to time we may need to collect additional data as part of our annual review or to comply with regulatory requirements.

What if you are currently reporting your in-scope trades yourselves via a different Trade Repository than DTCC?

Unless you notify us by 15 June at regulatory.business.support.europe@hsbc.com that you intend to continue to report your in-scope trades yourselves, we will start reporting them on your behalf from 18 June 2020 through the Depository Trust & Clearing Corporation (DTCC) and will generate a Unique Trade Identifier (UTI) for each reportable trade. You will be able to view your reported trades via the DTCC web portal, provided you register with DTCC.

As you have been reporting your in-scope trades to a different Trade Repository (TR) until now, DTCC must transfer all your reportable trades to their systems, a process called “porting” that all TRs will implement following the guidelines provided by the International Swaps and Derivatives Association (ISDA).

Please complete the TR Portability Form (PDF, 761KB), send it to your Trade Repository as soon as possible and inform us at regulatory.business.support.europe@hsbc.com when it is done. You will also need to complete the DDRL-DDRIE Mandatory Delegated Light Onboarding Form (PDF, 337KB) and send it to gtr-onboarding@dtcc.com.

If you have never or only partially reported your trades with HSBC, you can notify us at regulatory.business.support.europe@hsbc.com so we can report future lifecycle events for these trades on your behalf.

We will also need you to provide us with the following information when relevant:

  • Any change to your LEI. As you know, every trading entity has the obligation to obtain and maintain a Legal Entity Identifier (LEI). We cannot successfully report a trade without a valid LEI for your entity.
  • Notification of any change to your EMIR classification, as our EMIR REFIT reporting obligation only apply to trades with NFC- counterparties; and
  • From time to time we may need to collect additional data as part of our annual review or to comply with regulatory requirements.

Frequently Asked Questions for clients using a different Trade Repository than DTCC

 

Last updated: 1 June 2020