SAP Treasury’s Strategy for Seamless Compliance worldwide
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 29th of April 2024, and in the UK on the 30th of September 2024.
The Updated EMIR Refit introduces the following main changes:
For more details about these changes, refer to this article on the implications of the EMIR Refit.
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:
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:
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:
Reach out to Michal Šárnik to receive assistance on this topic.
In the second instalment of the Zanders series on the DRM model, the Risk Management Strategy (“RMS”) and the DRM process are introduced and with it the new concepts that the IASB have
Find out more
In January 2022, the OECD incorporated Chapter X to the latest edition of their Transfer Pricing Guidelines, a pivotal step in regulating financial transactions globally. This addition
Find out more
Our technology partnerships are core, foundational elements of our risk and treasury transformations at Zanders. For us to guide our clients through their digitalization journeys and keep
Find out more
In large organizations, the tendency is to select large scale ERP systems to support as much of the organization's business processes within this system. This is a goal that is driven
Find out more
The current standards for hedge accounting present significant challenges for financial institutions engaged in dynamically hedging their portfolios. The corresponding type of hedging
Find out more
Economic instability, a pandemic, geopolitical turbulence, rising urgency to get to net zero – a continuousstream of demands and disruption have pushed businesses to their limits in recent
Find out more
The European Committee (EC) has approved the regulatory technical standards (RTS) that include the specification of the Net Interest Income (NII) Supervisory Outlier Test (SOT). The
Find out more
The European Banking Authority (EBA) published its roadmap on the Banking Package, which implements the final Basel III reforms in the European Union. This roadmap develops over four phases,
Find out more
This paper offers a straightforward analysis of the Basel Committee on Banking Supervision's standards on crypto asset exposures and their adoption by 2025. It critically assesses
Find out more
In recent years, consumers’ and investors’ interest in sustainability has been growing. Since 2015, assets under management in ESG funds have nearly tripled, the outstanding value of
Find out more
Model risk from risk models has become a focal point of discussion between regulators and the banking industry. As financial institutions strive to enhance their model risk management
Find out more
We touch upon the main difficulties experienced by financial institutions in the Netherlands based on a combination of project experience, results of a survey, main attention points from
Find out more
In October 2023, the European Banking Authority (EBA) published a report[1] with recommendations for enhancements to the Pillar 1 prudential framework to reflect environmental and social
Find out more
Liquidity and funding risk While European banks generally have sufficient liquidity, there are potential challenges on the horizon. Recent events, including bank failures in the United
Find out more
But what happens after implementation, when the project team has packed up and handed over the reins to the employees and support staff? The first months after a system implementation can
Find out more
In this article, we explore this stablecoin payments trial, examine the advantages of digital currencies and how they could provide a matching solution to tackle the hurdles of international
Find out more
Additionally, business partners are essential in SAP for recording information related to securities issues, such as shares and funds. The SAP Treasury Business Partner (BP) serves as a
Find out more
But the adoption of ISO 20022 XML messaging goes beyond SWIFT’s adoption in the interbank financial messaging space – SWIFT are currently estimating that by 2025, 80% of the RTGS (real
Find out more
In the stress test methodology, participating banks are required to evaluate the impact of a cyber attack. They must communicate their response and recovery efforts by completing a
Find out more