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Are You Ready for EMIR Reporting?

Insight Robin Powers Robin Powers · January 17, 2014

Mandatory trade reporting under EMIR is scheduled to begin on February 12th, 2014. ISDA and the FOA have published the "EMIR Reporting Delegation Agreement" (the "Delegation Agreement") which provides the OTC Derivatives market industry with a tool to document delegated reporting arrangements.

The Delegation Agreement generally contemplates that one party (generally the swap dealer) will submit derivatives trade data to an agreed trade repository on behalf of the other party (generally the buy side customer). The Delegation Agreement also includes a number of schedules: (i) the "Election Schedule" is mandatory and sets out all the elections and information which the parties are required to make or provide with respect to the main body of the agreement; (ii) an optional static data schedule, containing information that will remain consistent across all derivatives transactions; and (iii) an optional operational and procedural provisions schedule.

The Delegation Agreement may be executed by an agent on behalf of the entities for which it has signing authority with respect to derivatives transactions. The elections in the schedules to the Delegation Agreement may vary across entities, in which case the agent must make the variation of elections clear to the reporting party.

Provisions to note in the Delegation Agreement:

  • the Delegation Agreement governed by English law;
  • the Delegation Agreement is one-sided to the benefit of the swap dealers, reflecting that they are not obliged to accept the reporting delegation, but rather are offering customers an accommodation;
  • the delegating party maintains legal responsibility for reporting under EMIR and must indemnify the reporting party (with typical exclusions for gross negligence, fraud, etc.);
  • the reporting party may unilaterally amend the Delegation Agreement to reflect changes in law, rule, regulation or "operational requirements". If the delegating party rejects the amendment, the Delegation Agreement is terminated, leaving the delegating party the responsibility of making new reporting arrangements.

The Delegation Agreement can be found here on ISDA’s EMIR Focus Page under EMIR LINKS - Frequently Used Documentation. If you have any questions regarding your reporting under EMIR, please contact your Rimon attorney.