Frequently asked questions
These frequently asked questions have been compiled following comments REGIS-TR has received from customers and market participants concerning BREXIT.
Q1 Is REGIS-TR considering relocating any part of the TR business as a result of BREXIT?
Yes. REGIS-TR will maintain its existing EU TR status to provide reporting services to firms in the EU-27. In order to do so, REGIS-TR will launch of a new UK TR, according the FCA's requirements in the UK, to also service UK-based firms.
Q2 Given the uncertainty of the Brexit timeline, would it be possible to start to set-up new memberships and have them on hold waiting for activation at the most appropriate time?
We will require firms to set up new memberships at REGIS-TR's UK TR well in advance of Brexit day, with the first reporting to the UK TR from Monday 1st April 2019.
Q3 Would it be possible for a UK entity to use an EU entity to report its business to the UK TR?
Yes it will - in this case, the EU entity will need to onboard onto REGIS-TR's UK TR.
Q4 Is REGIS-TR considering a review of/changes to its GTCs as a result of BREXIT? If so, in what respect(s) and to what extent is this likely to impact its members? *NEW 08/03/2019
REGIS-TR's GTCs for the EU TR comply with EU / Luxembourg law. GTCs for the UK TR are modelled on the EU ones, but incorporating any necessary changes in order to comply with UK (England & Wales) law. The draft GTCs are now available from your Relationship Manager for your review.
Q5 Is there any group rebate scheme in place that can apply for activities conducted by different entities of the same group (e.g. EU reporting activity to EU TR and UK reporting activity to UK TR)?
The requirements of both EMIR, and the UK's version of it, are that the two systems must remain operationally and financially separate from one another, therefore it is not possible to provide discounted or group rates where firms report to both the UK and EMIR TRs.
Q6 Would it be possible to have access to a testing environment before going live? Is it necessary to reserve the access?
Yes, the UK TR testing environment will be available for connectivity and testing use from 11/03/2019. It is not necessary for firms to reserve access to the environment.
Q7 What are the minimum cost to be taken in consideration for setting up a new membership? *NEW 08/03/2019
The draft fee schedule for the UK TR is now available from your Relationship Manager.
Q8 We are a UK entity reporting to RTR - what is the impact from Brexit?
From Brexit day, UK firms will no longer be subject to EMIR, but will have a comparable reporting obligation under the UK's version of EMIR - such reporting must be sent to a UK TR authorised by the FCA. Therefore you will need to onboard onto REGIS-TR's UK repository.
Q9 We are a EU entity reporting to RTR - what is the impact from Brexit?
EU entities will continue to report their data to EU TRs. Note that where your counterparty is domiciled in the UK, from Brexit day onwards, they will no longer report to an EU TR, and therefore your data will no longer be included in the EU Inter-TR reconciliation.
Q10 We are an EU entity reporting to RTR on behalf of UK firms (delegated reporting) - what is the impact from Brexit?
Transactions involving UK firms will need to be reported to a UK TR authorised by the FCA from Brexit day. This reporting can be provided by an EU / non-UK firm. Under these circumstances you will need to onboard onto REGIS-TR's UK TR.
Q11 We are reporting centrally on behalf of all our group entities that are doing derivatives, including for the UK entities as well. What would be in your opinion the outcome of the discussions on Brexit: will UK entities have to report by themselves, will the FCA reporting look like EMIR?
From the draft documents which the FCA has provided to the public so far, it appears that the FCA reporting will be almost identical to the EMIR reporting, in form and scope and method. Therefore delegating your reporting is also an option to meet the FCA's reporting requirements, just as it is under EMIR.
Q12 We have a delegated reporting system in place where we perform double-sided reporting for our counterparties. After Brexit, will we need to start sending single-sided reporting to a UK TR on behalf of the UK counterparty and single-sided reporting for ourselves to an EU TR? *NEW 08/03/2019
Yes, that is correct.
Q13 Will we need to on-board separately from our existing accounts? *NEW 08/03/2019
Yes, because the UK TR will be operated by REGIS-TR UK Ltd, the sister company of REGIS-TR SA, therefore you will need to onboard and sign legal agreements with REGIS-TR UK Ltd.
Q14 Will the interface spec be the same as the current interface, with a different end-point?
Yes, the user-facing parts of the system will be virtually identical to the existing EMIR system, but will link to the UK TR database, rather than the EU one.
Q15 Will the existing ESMA rules apply to begin with?
From the draft documents which the FCA has provided to the public so far, it appears that the FCA reporting will be almost identical to the EMIR reporting, in form and scope and method.
Q16 Will there be a separate end-point for UAT and Production?
Yes, as there is for the EMIR system, there will be separate UAT and Production environments for the UK TR.
Q17 Which legal entities will be able to use the new TR?
Legal entities which report for themselves, because they have a reporting obligation under the UK's version of EMIR, and firms reporting on behalf of legal entities which have a reporting obligation under the UK's version of EMIR will be able to use the new UK TR.
Q18 Will there be any changes for the UK to the technical standards, validations and formats versus those we use today for EMIR?
The FCA has not yet published the final versions of the technical standards. However, you can find information on their proposals at: https://www.fca.org.uk/publication/consultation/cp18-36.pdf Page 850 details the single change which the FCA is proposing to make - the value 'A' will no longer be permitted in the field Corporate Sector of the Reporting Counterparty.
Any change the FCA makes to the technical standards will be incorporated into REGIS-TR validation set to ensure correct reporting to the UK TR.
Assuming that there are no other changes for the UK, REGIS-TR's current technical specifications and reporting formats will also apply to the UK TR, with the same field names, values, field lengths etc.
Q19 Is there any guidance you can give us about Jersey, Guernsey, Isle of Man and Gibraltar entities?
Jersey, Guernsey and the Isle of Man (collectively Crown Dependencies) are already not part of the EU except for free trade in goods. They are also not part of the UK. They voluntarily choose whether or not to adopt EU legislation and are treated as third countries under EMIR and MiFID II.
Our expectation is that, as third country firms, entities in Jersey, Guernsey and the Isle of Man do not currently have a reporting obligation under EU648/2012 EMIR.
Since the FCA does not regulate those firms, we suggest approaching the Jersey FSC, the Guernsey FSC or the Isle of Man FSA for clarification on what changes (if any) will impact their regulatory reporting requirements due to Brexit.
Gibraltar, by contrast, is a British Overseas Territory, is not part of the UK but is part of the EU – the government of Gibraltar is responsible for the transposition of EU law into local law. Gibraltar firms are not regulated by the FCA, but by the Gibraltar FSC. Gibraltar will leave the EU when the UK leaves the EU, and therefore we expect changes to its reporting.
Again, we suggest firms contact the Gibraltar FSC for clarification.
Q20 Will open and matured trades be ported to the new REGIS-TR UK TR before Brexit? **UPDATED 08/03/2019**
The ESMA statement of 1st February defines that UK counterparties can request their EU TR to port their UK data to the UK TR.
Q21 Have either of ESMA or the FCA given you visibility over what will be “third-country markets considered as equivalent to a regulated market” post Brexit? *NEW 08/03/2019
Neither ESMA nor the FCA have discussed this with us.
Q22 I understand that ESMA published some guidance on Brexit recently - where can I find this? *NEW 08/03/2019
for ESMA'S PUBLIC STATEMENT On issues affecting reporting, recordkeeping, reconciliation, data access, portability and aggregation of derivatives under Article 9 EMIR in the case of UK withdrawal from the EU without a transitional agreement.
Q23 What actions will EU TRs take on matured and historical data for UK counterparties? *NEW 08/03/2019
ESMA have not requested that EU TRs perform any actions on the UK legs of matured deals in the EU TR, therefore these will remain in the EU TR as matured.
Q24 What actions will EU TRs take on outstanding data for UK counterparties? *NEW 08/03/2019
As described in the ESMA statement of 1st Feb, EU TRs are required to terminate the UK legs of outstanding trades. ESMA has instructed TRs to use an internal flag to do this, and to set the termination date to 29th March 2019.
Q25 What actions will REGIS-TR perform on trades which consist of a UK leg and an EU leg which have been reported with the delegation flag set to Yes? *NEW 08/03/2019
Outstanding trades which consist of a UK leg and an EU leg which have delegation set to Yes will have it switched to No.
Q26 Should we continue to report lifecycle events and corrections for our UK reports to the EU TR after Brexit date? *NEW 08/03/2019
ESMA clarifies the reporting requirements for UK data post Brexit in section 2 of its statement:
UK counterparties are not expected to report to EU27 TR any derivative concluded on 29 March 2019 and onwards.
UK counterparties are not expected to report correctly to EU27 TR any derivative concluded prior 29 March 2019 that was rejected as of 29 March 2019, neither to report amendments to any derivative concluded prior to 29 March 2019.
Q27 I have been reporting using delegation to the EU TR. How should I identify the counterparties to the trade in future, when I will be reporting one leg to the EU TR and one to the UK TR? *NEW 08/03/2019
To the EU TR you are reporting on behalf of the EU party. Therefore the EU party’s LEI goes in the party 1 field, the LEI of its counterparty in the party 2 field, and all the other data reported must reflect the transaction from the EU party’s perspective.
To the UK TR you are reporting on behalf of the UK party. Therefore the UK party’s LEI goes in the party 1 field, the LEI of its counterparty in the party 2 field, and all the other data reported must reflect the transaction from the UK party’s perspective.
Q28 How can I use the delegation flag in future in the EU TR? *NEW 08/03/2019
After Brexit, the delegation flag can only be used where both parties are EU firms. It cannot be used where one leg is an EU firm and one is a UK firm, as each leg will need to be reported separately to the correct TR.
Q29 What is the exact date for the BREXIT migration at REGIS? *NEW 08/03/2019
The intention is that for firms who have completed Production onboarding before 29th March and who have asked us to migrate their data, we will move the data over the Brexit weekend (30th and 31st March).
Q30 Which filenames can we use for our submission files? *NEW 08/03/2019
The Technical Release Note provides details of the naming convention which must be followed when submitting files via SFTP.
By contrast, for the submission of flow via the website or through web services (SOAP and API), there is no filenaming convention imposed by REGIS-TR, therefore clients are free to adopt the filenames they prefer when using these channels.