ESRB: Reporting entities and TRs to make progress on EMIR data quality

July 24, 2020

The European Systemic Risk Board (ESRB) have provided a response to ESMA’s consultation paper on the technical standards for reporting and data quality under EMIR REFIT.

Control Now completed an analysis on the consultation paper in March 2020 which includes 74 new data fields, new reporting obligations and inter TR reconciliations being stepped up! The final report is due Q4 2020, with go live expected 18 months later.

The ESRB have congratulated ESMA on the proposed changes and have stated how important the data collected through EMIR reporting has been to their monitoring of market risks during the pandemic and Brexit.

Please find highlights of the ESRB comments below;

“The ESRB has worked on the analysis of data collected under EMIR since the early stages of that reporting mandate”

“The amendments proposed by ESMA in this consultation represent a remarkable step forward in terms of the enhancement of the reporting framework.”

How ESRB have recently used EMIR data;

1. Brexit analysis:

“In the course of 2019, the ESRB Secretariat provided its member institutions with daily analysis, combined with regular dissemination of a set of aggregates which captured key aggregate developments between the United Kingdom and the EU, including developments in central clearing and margins”

2. Impact on financial markets caused by COVID

“Daily monitoring of liquidity risks arising from margin calls in the context of the coronavirus (COVID-19) crisis – one of the five priority areas in light of the heightened volatility and declines in asset prices.”

“Granularity and standardisation were key elements in the ESRB’s ability to promptly “convert” its daily monitoring tools into a COVID-19 monitor, providing the analytical basis for its” monitoring of developments. This, in turn, enabled the General Board to discuss policy options within a matter of weeks.”

“Timely data with high levels of granularity and frequency are the best way of supporting policymakers’ analysis and decision-making processes”

But… Data quality issues have been identified;

“These experiences have also shown that substantial data quality issues”

“The staff of the ESRB Secretariat believe that it is now time for both reporting entities and trade repositories to make substantial progress on this front.”

“Data quality should therefore be regarded as a common good – one which results in key benefits for the stability of the financial system (and thus also for reporting entities themselves).”

ESRB see ESMA consultation paper proposal as a key pillar to supervisory reporting

“the improvements proposed by ESMA in this consultation paper are fully in line with the “key pillars” identified by the ESRB Secretariat in its response to the European Commission’s consultation document “Fitness check on supervisory reporting””

  • the importance of having access to granular, timely and high-quality data;
  • the need to support the process of data standardisation;
  • the need to continue the adoption of existing and new technologies to improve efficiency;
  • the importance of enhancing the ability to monitor developments across markets, instruments and sectors.