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 the memberships 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 currently anticipated for Monday 1st April 2019.
Q3 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.
Q4 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.
Q5 We are an EU entity reporting to RTR - what is the impact from BREXIT?
EU entities will continue to report their data to EU TRs. Note that when 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.
Q6 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.
Q7 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.
Q8 We are an EU entity reporting to RTR on behalf of UK firms (delegated reporting) - what is the impact from BREXIT?
The UK leg of a 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.
Q9 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.
Q10 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. It is also forbidden to give cross subsidisation. However, REGIS-TR would like to keep extra costs for clients as limited as possible and will offer a cost related and highly competitive pricing.
Q11 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 soon. The system will be very similar to the EMIR environment of now. It is not necessary for firms to reserve access to the environment.
Q12 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 exiting EMIR system, but will link to the UK TR database, rather than the EU one.
Q13 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.
Q14 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.
Q15 Will open and matured trades be ported to the new REGIS-TR UK TR before BREXIT?
REGIS-TR is conferring with the FCA currently on what data must be moved to the UK TR at BREXIT time, and will provide further details once available.
Q16 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.