From the Regulators

The guidelines aim to ensure greater consistency in reporting by trade repositories

By James Langton |

European regulators are proposing new guidelines on how trade repositories report derivatives data.

The European Securities and Markets Authority (ESMA) published a consultation paper Friday on guidelines for the calculation of derivative positions by trade repositories (TRs).

In the wake of the financial crisis, regulators have started requiring that more derivatives data be reported to TRs, and that his data be made available to regulators, so that they can monitor for systemic risk in this part of the market.

The ESMA has found inconsistent approaches among the repositories in how they calculate and report derivatives positions. "This hinders the successful aggregation of data across TRs, which is required for monitoring systemic risks to financial stability," the ESAM says in a statement.

On average, the repositories in Europe are receiving around 400 million reports relating to derivatives each week, it says.

ESMA proposes to introduce guidelines to ensure greater consistency in how TRs calculate positions. The guideliens will provide specific information on the aggregation of certain data fields along with guidance on the timing of calculations, the scope of the data used, and calculation methodologies.

The ESMA is seeking feedback on the draft guidelines by Jan. 15, 2018 and expects to publish a final report on the guidelines in the first half of 2018.

Separately, the ESMA also published a report Friday setting out technical rules and guidance on stress test scenarios for money market fund managers. The new rules are intended to help implement a new regulatory framework to ensure the stability and integrity of money market funds in the region.