Updated EMIR Refit and SAP Trade repository reporting: are you ready? 

In the first half of 2024, European treasurers are confronted with a new item on their agenda: the updated EMIR Refit. The new EMIR reporting rules will be implemented in the EU on the 29^th of April 2024, and in the UK on the 30^th of September 2024.  

The Updated EMIR Refit introduces the following main changes: 

• Harmonizing the reporting formats to ISO 20022 XML 
• Increasing the number of reporting fields from 129 to 203 (204 in the UK) 
• Introducing new fields: UPI (Unique product identifier) and RTN (Report Tracking Number) 

For more details about these changes, refer to this article on the implications of the EMIR Refit. 

Trade repository reporting in SAP Treasury and Risk management 

SAP Treasury users inquire on how to deal with the changes in their solution, what comes out of the box, what adjustments are necessary,and where the challenges are.  

Since the introduction of the original EMIR reporting in 2012, SAP has covered the requirements for EMIR reporting in the component Trade repository reporting. It is a robust functionality fully integrated into the SAP Transaction manager environment. Due to varying requirements among the various trade repositories, SAP has ceased to enhance the solution and referred clients to the partner solution of Virtusa. However, the SAP Trade repository solution (“TARO”) is still supported on all current releases in the existing functional extend and can be used and adopted by in-house developments and consulting partners (SAP Note 2384289). Using the Virtusa solution or a custom solution, with EMIR Refit, a number of new required fields needed to be incorporated into the deal management data model.  

The following changes have been provided by individual SAPNotes over the course of the past months: 

• Unique Product Identifier (ISO 4914 UPI) and Report Tracking Number (RTN) have been introduced. They are available under the tab “Administration” in the deal data. 
• These fields have been introduced to the relevant BAPIs, mirror deal functionality, as well as to the SAP TPI interface.  

New reporting fields 

The EMIR Refit solution utilizes fields, which have already been made available earlier, over the course of the original EMIR Refit in 2018 (Switch FIN_TRM_FX_HMGMT_3), and are present also under the tab “Administration” for the relevant product categories:  

• CFI Code (Classification of Financial Instruments, ISO 10692 Classification) 
• ISIN on the deal level for OTC deals 
• Market Identification Code (MIC) 

The recently introduced field is the UPI, which is a classification assigned by ANNA Derivatives Service Bureau. It consists of 12 characters and reflects both the Asset class, Instrument type, Product and the CFI. The CFI itself is an instrument classification which is 6 characters long. 

 The next consideration is how to populate these fields. In case of external trades, the CFI and UPI can be delivered by the trading platform. SAP Trade platform integration (TPI) covers the transfer of these fields from the trading platforms.  

Since 2019, in case of OTC deals, EMIR Refit made financial counterparties (FC) solely responsible and legally liable for reporting on behalf of both counterparties, provided the non-financial counterparty is below the clearing threshold (NFC-). Therefore, this option would be necessary only for large financial entities, as smaller corporates are not obliged to report external OTC deals, as the counterparty reports on their behalf.  

Corporates are obligated  to report their intercompany deals, under the condition that they cannot apply for an opt out with their regulator. In that case, the CFI and UPI need to be derived in-house.  

For that purpose, there are enhancements (BAdIs) available, to implement one's own derivation logic.  

The reporting format has been standardized with ISO 20022 based XML. XML output can be easily generated based on a DMEE structure. Unlike the original version from 2012, SAP does not deliver the new report structures needed for the EMIR Refit. This part needs to be set up in a project.  

The impact of the EMIR Refit in the trade repository reporting of your organisation can bring up many specific questions. We are happy to help you answer them from both the advisory as well as the technical implementation point of view. Examples on how Zanders can assist is: 

• Implementing the new Emir Refit requirements in SAP Treasury 
• Assisting in applying for the exemption of reporting internal trades with the various regulators 

Reach out to Michal Šárnik to receive assistance on this topic.