The industry has now been live with Trade Repository reporting for a month. As the industry adapts to these new regulations minor adjustments are being made, which may affect trade repositories and/or reporting entities. In addition further requirements come in to force during the next 12 months – the industry must also make changes to adapt to these.
Please find below some information on upcoming changes to the TR reporting, taking place in June. Further information will be published on the web, along with relevant documentation including an updated version of the TR handbook, please see http://www.nasdaqomx.com/europeanclearing/news/trade-reporting-services.
Position reporting
Initially, EMIR only allowed TR reporting on a trade level. The industry asked the European central authority ESMA to reconsider and allow position reporting, as this is more logical for exchange traded derivatives (ETDs). The Q&A issued by ESMA in late December stated that position reporting is allowed. This is positive, as we see a need for position reporting in order to report collateral and mark-to-market values, which is a requirement from August this year.
The other major European CCPs are already reporting positions and NASDAQ OMX Clearing intends to switch to position reporting in June, which also means that our counterparts need to make the corresponding changes at the same time. By making the switch in June, we will be prepared to start reporting collateral and mark-to-market values in August. We will also avoid the normal freeze period during the summer.
Below is some additional detailed information.
- NASDAQ OMX Clearing will report positions for ETD and most OTC contracts (excluding interest rate swaps and TM FRA). All forward contracts will be reported on position level.
- Daily Mark-to-Market values will be reported on position level for the same contracts (MtM values for interest rate swaps and TM FRA will be reported on trade by trade basis)
- New trades will only be reported in their end of day state
- A compression event will be reported for each new trade, indicating that the trade has reached its end-of-life state
- Updates to a trade T+1 or later will be reported as new trades updating the existing position
NOS migration
From 7 April, all products previously cleared by NOS Clearing will be cleared by NASDAQ OMX Clearing. All contracts that have been cleared by NOS Clearing and that are still open on 4 April, will be migrated to NASDAQ OMX Clearing during the weekend of 5-6 April. This process requires actions to be taken by NOS members that have not delegated their reporting to NASDAQ OMX. Detailed instructions will be communicated shortly to NOS members.
Unique Trade Identifier (UTI)
The current position UTI format will be amended in order to add two digits (year) in order to avoid issues with re-occurring instrument series names.
The latest Q&A from ESMA, published 11 February, includes new specifications on the UTI format. The Q&A indicates that the format agreed by the European CCPs and currently used, is not approved by ESMA and should be changed, no later than February 2015. Specifically, the first three digits of the UTI prefix need to be changed from “000” to “E01”. The Q&A also indicates that the portion of the UTI prefix that includes the MIC code should be the trading venue rather than the CCP code. This has been questioned by the European CCPs and we will come back with further details when a final decision has been reached.
Best regards,
NASDAQ OMX Clearing
About NASDAQ OMX
The inventor of the electronic exchange, The NASDAQ OMX Group, Inc., fuels economies and provides transformative technologies for the entire lifecycle of a trade - from risk management to trade to surveillance to clearing. In the U.S. and Europe, we own and operate 26 markets including 3 clearinghouses and 5 central securities depositories supporting equities, options, fixed income, derivatives, commodities, futures and structured products. Able to process more than 1 million messages per second at sub-40 microsecond average speeds, our technology drives more than 80 marketplaces in 50 developed and emerging countries into the future, powering 1 in 10 of the world’s securities transactions. Our award-winning data products and worldwide indexes are the benchmarks in the financial industry. Home to more than 3,300 listed companies worth $7 trillion in market cap whose innovations shape our world, we give the ideas of tomorrow access to capital today. Welcome to where the world takes a big leap forward, daily. Welcome to the NASDAQ OMX Century. To learn more, visit www.nasdaqomx.com. Follow us on Facebook (http://www.facebook.com/NASDAQ) and Twitter (http://www.twitter.com/nasdaqomx). (Symbol: NDAQ and member of S&P 500)
About NASDAQ OMX Commodities
NASDAQ OMX Commodities is the brand name for the NASDAQ OMX Group’s worldwide suite of commodity related products and services. The NASDAQ OMX Commodities offerings include power, natural gas and carbon emission markets and clearing services. NASDAQ OMX Commodities is a trademark of the NASDAQ OMX Group, Inc.
NASDAQ OMX Commodities Europe is the trade name of NASDAQ OMX Oslo ASA which is authorized as a commodity derivatives exchange by the Norwegian Ministry of Finance and supervised by the Norwegian Financial Supervisory Authority. All trades with NASDAQ OMX Commodities Europe are subject to clearing with NASDAQ OMX Clearing.
NOS Clearing ASA is the leading clearing house for the freight market and a specialist clearing provider to the commodities markets. The company is wholly owned by the NASDAQ OMX Group Inc. The clearinghouse, which is situated in Oslo, has more than 300 members.
NASDAQ OMX Clearing AB is authorized and supervised as a multi-asset clearinghouse by the Swedish Financial Supervisory Authority in Sweden as well as authorized to conduct clearing operation in Norway by the Norwegian Ministry of Finance.
For more information, visit www.nasdaqomx.com/commodities
NASDAQ OMX's Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about NASDAQ OMX's products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX's control. These factors include, but are not limited to factors detailed in NASDAQ OMX's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.
This document is being directed solely at and may only be communicated to persons: (i) who have professional experience in matters relating to investments as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or, (ii) who are high net worth companies, unincorporated associations and trustees of high value trusts within Article 49(2)(a)-(d) of the FPO, or (iii) to whom it may otherwise be lawful to distribute it (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons