Frequently Asked Questions (“FAQs”)

The European Market Infrastructure Regulation (“EMIR”) is a European Union (“EU”) and United Kingdom (“UK”) Regulation that, amongst other things, sets out requirements on reporting over-the-counter (“OTC”) derivative contracts and exchange-traded derivative contracts (“ETDs”) to Trade Repositories (“TRs”) and clearing standardised OTC derivative contracts and ETDs through authorised central counterparties (“CCPs”).

EMIR was introduced in 2012, and forms part of the EU's regulatory response to the financial crisis. The aim of the regulation was to increase transparency and reduce systematic risk in OTC derivative and ETD markets, as well as establishing robust business conduct standards for both CCPs and TRs.

A review of EMIR took place, referred to as EMIR Refit, with the purpose of proposing measures to reduce disproportionate compliance costs, transparency issues and insufficient access to clearing counterparties.

The European Commission (“EC”) published the Regulatory Technical Standards (“RTS”) and Implementing Technical Standards (“ITS”) in the Official Journal of the European Union on 7 October 2022, which form the revised transaction reporting standards (“EU EMIR Refit”). EU EMIR Refit RTS and ITS entered into effect on the twentieth day following their publication, triggering an 18-month implementation period. The compliance date for the changes is 29 April 2024, at which point firms are required to report under the new EU EMIR Refit technical standards.

The UK Financial Conduct Authority (“FCA”) and the Bank of England (“BoE”) published a joint policy statement on 24 February 2023 setting out the final amendments to Technical Standards in relation to the revised reporting requirements (“UK EMIR Refit”). The compliance date for the changes is 30 September 2024, at which point firms are required to report under the new UK EMIR Refit technical standards.

Under EMIR Refit, a UPI will be assigned to an OTC derivative product, allowing regulators to understand which underlying product the derivative tracks. Use of the UPI is being implemented to help effective aggregation of OTC derivative transaction reports on a global basis. 

The Derivatives Service Bureau ("DSB") Ltd has been designated as the sole service provider of UPI codes and operator of the UPI reference data library. The UPI will be distributed by ANNA DSB as the single master source of UPI in the industry and organisations will be required to retrieve UPIs themselves. ANNA DSB can be accessed here. UBS will not provide the UPI on client confirmations but will make it available to clients for cleared OTC transactions via the SwisKey Clearing reports.

Derivatives will be identified using an International Securities Identification Number ("ISIN") code in either of the following cases: (a) they are admitted to trading, or traded on a trading venue, or (b) they are traded on a systematic internaliser and its underlying is admitted to trading or traded on a trading venue or is an index or basket composed of instruments traded on a trading venue. All other OTC derivatives will be reported with a UPI code.

Unique Transaction Identifier (“UTI”)

EMIR Refit has introduced changes to the UTI waterfall approach to help counterparties to meet their reporting requirements. Under the revised approach, the UTI generating counterparty will be required to provide the UTI to the receiving counterparty by 10:00am (CET) on T+1 under EU EMIR Refit, and 10:00am (UTC) on T+1 under UK EMIR Refit.

For EMIR in-scope ETD and OTC Cleared Derivative Transactions, UBS will continue to generate the UTIs as the Clearing Member and share these UTIs via SwisKey Clearing (‘SKC') reports.

For EMIR in-scope OTC Bilateral Transactions that are not executed on a third-party platform, UBS Europe SE will continue to generate and share the UTIs in trade confirmations. These UTIs will also be available from DTCC’s Allege report.1

As UBS AG (including its branches) is not subject to the EMIR reporting requirements, you may choose to generate your own UTIs in a timely manner to fulfil your EMIR reporting obligation. Otherwise, UBS AG will continue to generate and share the UTIs as applicable. For EMIR delegated reporting, UBS would assume the role of UTI generator which is a pre-requisite of the service.

Custom Basket Code

UBS Europe SE will share the Custom Basket Code via the DTCC Allege report¹. UBS AG (including its branches) is not directly subject to the transaction reporting requirements under EMIR and will therefore not be using a Custom Basket Code for reporting purposes.  

For UBS AG (including its branches) the Custom Basket Code is composed with UBS AG (including its branches) LEI (BFM8T61CT2L1QCEMIK50) and Refinitiv Identification Code (RIC) with special characters removed. If no RIC for the basket exists, the custom basket code is composed of UBS’ executing entity LEI and reported UTI.

Report Tracking Number (“RTN”)

For ETD transactions with UBS Europe SE, the RTN will be shared via the SKC daily end of day reports. For bilateral FX IB transactions where a multilateral trading facility (“MTF”) is not involved, UBS Europe SE can share the RTN via FX Client Communication (“FXCC”). To sign up for FXCC ad no cost, please contact frcecommerce@ubs.com. For other OTC products executed on a third-party platform such as MarkitWire, the platform will share the RTN.

¹A free DTCC read only account is available at no cost to view the Allege report. Intraday Allege Activity Report Spec is available at DTCC Learning Centre. Please contact DTCC for further information regarding the DTCC account or Allege report. 

As part of the Transaction Data and Collateral Data changes, EMIR Refit has introduced new ‘lifecycle events’ which will require firms to report new action and event types going forward. The event types provide more details of the underlying action. Each action type has specific events that can be applied to it. Further information can be obtained by referring to the ITS: See EU ITS and UK ITS. UBS will be adhering to the validation rules and specifications issued by the respective regulators to comply with EMIR Refit requirements.

All EU and UK reporting counterparties encountering significant reporting issues including errors or omissions, will be required to notify their NCAs of: 

1. any misreporting caused by flaws in the reporting systems that would affect a significant number of reports; 
2. any reporting obstacle preventing sending reports to a Trade Repository within the reporting deadline;
3. any significant issue resulting in reporting errors that would not cause rejection by a trade repository in accordance with the draft RTS on data quality

Under UK EMIR, as per the joint FCA/BoE Policy Statement, the FCA noted that “it is for counterparties to judge what is material in a given situation, taking into account their own particular circumstances and the circumstances of the error. If counterparties are in doubt as to the materiality of a given error, they should be conservative and notify the FCA or Bank (as applicable)”.

The total number of reportable fields under EU and UK EMIR Refit has significantly increased to ensure completeness as well as accuracy of the reporting.

As a result of the newly reportable fields, we will be required to obtain additional information from our counterparties. While many of the new fields are logical additions, a number of fields largely deviate from the current standards and require considerable change.

Additional counterparty data points which will become reportable at EMIR Refit go-live include the following fields:

1. Entity Responsible for Reporting
2. Nature of Counterparty 2
3. Corporate Sector of Counterparty 1 & 2
4. Clearing Threshold of Counterparty 2
5. Reporting Obligation of Counterparty 2

A full list of the EU EMIR Refit reportable fields can be found in the EU EMIR Refit technical standards and ESMA EMIR Refit Validation Rules.

A full list of the UK reportable fields can be found in the UK EMIR Refit technical standards and FCA UK EMIR Validation Rules.

Yes, there is a transition period of 180 calendar days from the respective go-live dates, during which any outstanding in scope derivatives which do not require a modification due to a natural lifecycle event within this period are to be reported using the Event Type ‘Update’. Any contracts that mature or terminate during this period without any prior reportable event will not be required to be updated.

The EU’s temporary exemption from the EMIR clearing obligation for European Economic Area (“EEA”) incorporated PSAs expired on 18 June 2023. EEA incorporated PSAs are no longer allowed to bilaterally settle in-scope products and need to have arrangements in place to ensure that they can meet the EMIR clearing obligation.

For UK EMIR, HM Treasury announced its intention to extend the exemption for UK PSAs from the clearing obligation by a period of two years, expiring on 18 June 2025. Further information regarding this announcement can be found here.

There are no changes to the existing three fields used to pair for both EU and UK EMIR Refit:

1. UTI – the unique trade identifier
2. Counterparty 1 (Reporting counterparty) – the LEI of reporting counterparty 1
   
3. Counterparty 2 - the LEI of counterparty 2

However, EMIR Refit has significantly increased the number of matchable fields. Further details related to these fields can be found in the EU and UK Validation Rules.

EU and UK EMIR reporting obligations apply to all OTC derivative contracts (including cleared and uncleared transactions), and all ETD products.

Whether a counterparty to a transaction is required to report under EU and/or UK EMIR depends on their counterparty classification. EMIR identifies the following categories of counterparty to a transaction:

These categories are further broken into the following sub-categories of FCs and NFCs:

1. Large financial counterparty (“FC+”)
2. Small financial counterparty (“FC-“)
3. Large non-financial counterparty (“NFC+”)
4. Small non-financial counterparty (“NFC-“)
   

All FCs, CCPs and NFCs are required to report the entry into, modification of and termination of all in-scope derivative trades with any counterparty to the relevant TR or TRs authorised under EU EMIR or UK EMIR, collectively referred as to “EMIR”, no later than one working day following such event.

CCPs, FCs and NFCs (but importantly only those NFCs trading over the clearing threshold (NFC+s)) are required to report the daily valuation of any outstanding derivative transaction and any collateral posted to their counterparty (“Valuation Data”) to a TR, no later than the following working day.

UBS Europe SE is our only EEA incorporated entity in scope of the reporting obligation under EU EMIR.

1. UBS Europe SE is classified as an FC+. UBS Europe SE is required to report all of its in scope activity, irrespective of whether our counterparties are themselves in scope of the requirements. This reporting obligation and reporting type is referred to throughout as “House Reporting”.
   
   
2. Please note that as a Swiss legal entity, UBS AG (including its branches, e.g. UBS AG, London Branch) is considered a Third Country Entity (“TCE”) for the purposes of EMIR. Accordingly, to the extent you contract with UBS AG London Branch, we would not consider ourselves to be directly subject to the transaction reporting requirements under EMIR.

To the extent you are a UK or EEA incorporated entity or fund, you may have your own reporting obligations to comply with.

Where we undertake MDR, you must enter into a Mandatory Reporting Agreement (“MRA”), also commonly referred to as a Mandatory Regulatory Reporting Agreement (“MRRA”) which formalises certain terms relating to such reporting and assists in fulfilling our reporting responsibility.

The MRA / MRRA identifies the relevant transactions covered by the arrangement, i.e. bilateral and cleared OTC derivative transactions to which the client is a party and that are subject to the reporting obligation.

Both EU and UK clients should follow the below process:

1. You will need to onboard directly to the relevant TR at DTCC Global Trade Repository (“GTR”) - see question 15 for further guidance on which repository/repositories to onboard to.
   
2. Within the two repositories, two options will be available to you; either Single or Multiple entities. You will be required to onboard to DTCC GTR in order to obtain access to the DTCC reports that we have reported to the trade repository on your behalf.
   
3. The DTCC GTR account allows you as a client to view and download reports containing the submissions we have reported on your behalf. A ‘View & Reporting’ access level needs to be selected when onboarding for the DTCC GTR account. This provides the user with ability to access data reported via the online DTCC portal. As referenced in (i), creating a DTCC GTR account is a mandatory requirement of our delegated reporting service. Where you are acting on behalf of multiple entities, this is required for each LEI.
   
4. You have the ability to, and should regularly check and amend (where necessary) transaction reports submitted by us on your behalf.
   If you identify any trades on your DTCC reports that have not been accepted by DTCC (i.e. the trade is in ‘NACK’ status), we ask you to continue reviewing your DTCC reports for up to 5 business days post receipt of the ‘NACK’. During this time, we will be working to resolve the ‘NACK’ and resubmit the trade. If after the 5 business days, you continue to see the trade in ‘NACK’ state and want to verify the steps we are taking to resolve, we ask you to send your query along with trade details tosh-emir-client-service@ubs.com.
   
5. The current DTCC reporting model does not provide historical reports and we therefore strongly recommend that you download and save your reports on a daily basis.
   

DTCC GTR Support can be found by emailing gtr_onboarding@dtcc.com

EU EMIR: As of 29 April 2024, reports will be updated with the new reporting fields and report formatting for trades submitted to the DTCC Data Repository (Ireland) Plc.

UK EMIR: As of 30 September 2024, reports will be updated with the new reporting fields and report formatting for trades submitted to the DTCC Derivatives Repository Ltd.

The reports made available to clients in SwisKey Clearing will be updated with (i) new fields introduced as part of EMIR Refit and (ii) changes to formatting of existing fields to comply with the new rules. The changes are applicable for both EU and UK EMIR requirements.

Under EMIR 2.0, all counterparties who delegate their EU or UK EMIR reporting to us would need to sign up to the Counterparty Reference Data and Enrichment Service ("CRDE") offered by DTCC and submit the requested counterparty reference data, to allow the reporting obligation to be met.

CRDE will be decommissioned from the respective EMIR Refit go-live dates (29 April 2024 for EU EMIR and 30 September 2024 for UK Onshored EMIR). Post the respective go-live date, UBS will store the counterparty reference data internally.

All delegated reporting clients will be required to provide us with all relevant counterparty data directly or via the ISDA Amend – Self Disclosure for Margin Rules module, by populating the respective EU and UK questionnaires. Users may also select the ‘EMIR Refit’ module within ISDA Amend, which will direct you to the same location. We would encourage clients to complete the required questionnaires via ISDA Amend, however, where this is not possible, clients may populate the respective EU and UK Master Regulatory Disclosure Letter (“MRDL”) questionnaires and submit to us bilaterally. 

Whether you are 'Counterparty 1' or 'Counterparty 2' depends on the type of reporting being carried out. Where you are utilising our delegated reporting service, for all relevant transactions you are 'Counterparty 1' and the relevant UBS entity is 'Counterparty 2'. Where UBS Europe SE has a reporting obligation under EU EMIR, for trades where it is counterparty to the trade we will be reported as 'Counterparty 1' and you as the client will be 'Counterparty 2’. This applies to transaction, collateral and valuation reporting.

If you would like to delegate the reporting of additional funds, you can notify us of the funds by submitting their LEIs to us via UBS-EMIR-Programme@ubs.com.

The additional funds will need to be added either to the existing RFA or MRA (which may require an amendment), or by entering into a new agreement. We will notify you of all additional data required and inform you of the reporting start date for each additional fund.

Under the EMIR Refit requirements, position level reporting may be used for certain derivative contracts. UBS Europe SE will continue to report ETDs at transaction level, prior to their inclusion in a position, and to report the resulting position until maturity, even if the net position is zero.

For ETD transactions, we report the account base currency which is agreed as part of the onboarding process. You can change the currency by contacting your Client Hub representative. For OTC derivatives, we report the account base currency agreed in the Credit Support Annex.