European Securities and Markets Authority Finds Improvement in Supervision of Derivatives Data

The European Securities and Markets Authority has published the results of its peer review into the supervisory actions of six national regulators in enhancing the quality of derivatives data under the European Market Infrastructure Regulation. EMIR requires EU counterparties to a derivative contract to report details of their contract to one of the seven registered trade repositories supervised by ESMA. ESMA’s peer review was launched with the ultimate aim of enhancing the quality of the data reported under EMIR. National regulators from the U.K., Cyprus, Germany, France, Ireland and the Netherlands were included in the review, which focussed on: (i) the general supervisory approach to EMIR data quality taken by national regulators; (ii) the integration of EMIR into national regulators’ overall supervisory approach; and (iii) national regulators’ access, assessment and analysis of data. ESMA was also assessed on similar grounds.

The report found that while France, Ireland and the Netherlands were broadly meeting expectations on supervisory approaches to EMIR data quality, Cyprus, Germany and the U.K. were at an earlier state of the supervisory lifecycle. It also found that France and Ireland fully met expectations regarding the integration of EMIR into national regulators’ overall supervisory approaches, whereas Cyprus and the U.K. did not. The Netherlands fully met expectations on data access, analysis and assessment, while expectations were broadly met by Ireland, partially met by France and Germany and not met by Cyprus and the U.K. The report also sets out the potential short- and long-term actions that national regulators and/or ESMA should consider taking to improve data quality, including:
 

• Extending the Data Quality Action Plan, originally launched by ESMA and national regulators in 2014, to enhance the standard of data quality checks;
• A consideration by national regulators of whether their supervisory approaches are regular, proactive, thorough, comprehensive, advanced and well established;
• Ensuring the involvement of national regulators’ senior management in EMIR data quality supervision; and
• The provision of training and a supervisory briefing by ESMA to national regulator staff on EMIR data quality supervision.

A follow-up review is expected to occur in two years’ time.

View ESMA's Final Report on the peer review into supervisory actions.

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