The European Commission have published an RTS on how Trade Repositories should reconcile data “to ensure the high quality of the details of derivatives reported to trade repositories” (RTS on InterTR Rec, 2).
Purpose
This is a new RTS, which addresses the acknowledged "lack of initial specification of the reconciliation process by ESMA" resulting in;
"inconsistent reconciliation procedures,
inconsistent reconciliation timings
tolerances and categorization of fields decided by TRs
lengthy change request implementation times.
accumulation of a significant number of non-reconciled trades" (Final Report, 522)
Process
The new RTS sets out “a standardized process to enable trade repositories to conduct reconciliation in a consistent manner” (RTS on InterTR Rec, 2)
Reconciliation process (RTS on InterTR Rec, Article 3)
Response Files
“Each working day a trade repository shall make available (d) the reconciliation status of all reported derivatives", "in an XML format developed in accordance with the ISO 20022 methodology" (RTS on InterTR Rec, Article 4 (1)). The response files should be made available to all relevant entities "no later than 06:00 UTC on the working day following the day” (RTS on InterTR Rec, Article 4 (2)) Relevant entities include (RTS, Article 4(1));
Reporting counterparties,
Report submitting entities,
Entities responsible for reporting
Third parties (EMIR Article 78(7))
Implementation Dates
ESMA has proposed a 2 stage implementation. “The first stage, which will comprise a reduced number of fields, will start together with the start of the reporting obligation under Article 9 EMIR as amended by EMIR REFIT” (Final Report, 566) “It is proposed that the start of the second stage of the reconciliation process, where the full set of fields will become subject to reconciliation, should be two years after the start of the reporting obligation referred to in Article 9 EMIR ” (Final Report, 567)