**IMPORTANT UPDATE 29 March 2021**
On 29 March ESMA published the exact same amendments, but an important point to note is ESMA’s update to the EU EMIR validations are effective from 30 April, 2021. The FCA’s effective from date on these changes to the UK EMIR validations rules still remain as the 21 June 2021.**
The FCA has made a minor amendment to the EMIR validation rules that went live earlier this month. The amendment applies from 21 June.
In a statement at the end of last week, the FCA said: “On 18 March 2021, we published an update to the UK EMIR validation rules. Following the go-live of the last update to the Validation Rules on 8 March 2021, we were made aware of an issue relating to the instructions under field 1.30 (XXXX). This update reflects the amendment to the instructions in that field only which will apply from 21 June 2021.”
So what does this mean?
Field 1.30 – Variation Margin received – The FCA removed the following reference “If field 1.21 is populated with “U”, this field shall be left blank.”
This is all makes sense as if you’re marking Field 1.21 Collateralisation as Uncollateralised, then Variation margin will definitely not be posted. This also aligns with the previously issued Regulatory Technical Standards issued at a European Level, and also with the industry best practice issued by the trade associations.
So what next?
Kaizen provides quality assurance services across a number of regulatory regimes including the UK and EU versions of EMIR, and populating any of the margin fields where a firm marked field 1.21 as Uncollateralised would’ve definitely raised a flag in our testing results. We provide a completely independent and comprehensive review of the quality of your reporting through our Accuracy Testing and Advanced Regulatory Reconciliations so you can be sure you are meeting regulatory requirements for accurate and complete reporting.
- For a conversation on how Kaizen can help you to meet your obligations for the UK EMIR and EU EMIR regimes, please contact us.