With the regulatory requirement to report derivatives trades to trade repositories (TRs) under the European Markets Infrastructure Regulation (EMIR) now in place, custodians should evaluate the pros and cons of delegated reporting, says Mark Husler of UnaVista, the TR subsidiary of the London Stock Exchange Group.
Mark Husler, global head of Product Development, Information Services, UnaVista, notes that in the last few weeks there has been a significant increase for firms signing agreements and being on board for submitting trades. “We’ve received trades on behalf of 2,500 counterparties. Those numbers do indicate that a large number of firms are reporting under the obligation of EMIR,” he says. “Second point is that we have seen a significant increase in firms doing delegated reporting, so submitting trades on behalf of other counterparties.”
Husler notes a growing demand from buy side for their sell side institutions to provide reporting on their behalf. “Each firm needs to take the decision whether to offer it or not and the reasons they are offering it,” he says. “I think it’s a decision that each firm needs to take as to whether they are offering that or not and the reasons that they are offering it, whether its for customer services reasons or the commercial services that they offering. Custodians should be considering the pros and cons of offering delegated reporting.”
Husler says he has seen a lot of interest in partial delegation where a custodian, for example, can only provide 80% of their clients’ record. The TR will allow those clients to log in and enrich the record to complete all of the mandatory fields of information, resulting in partial delegation as opposed to full delegation. “We have a couple of flavors of that kind of reporting that is already live with firms today and its generated quite a lot of interest,” says Husler.
“I don’t think the size of the custodian is the factor, its more of the what level of data they hold on behalf of their clients. It’s just really a theme that’s evolving at the moment and a number of firms are still evaluating whether to offer delegated reporting. There are obvious customer service reasons to do it to make sure you are offering your clients a range of services but it’s obviously a big decision for each institution to make. “
Custodians Should Evaluate Their Delegated Reported Offerings, says TR
With the regulatory requirement to report derivatives trades to trade repositories (TRs) under the European Markets Infrastructure Regulation (EMIR) now in place, custodians should evaluate the pros and cons of delegated reporting, says Mark Husler of TR UnaVista.