On November 7th ESMA authorized four Trade Repositories to offer their services to Europe's entities and ESMA's updated version of EMIR implementation timeline showed the 12th of February as the start date for trade reporting, for all derivative asset classes, for both ETD and OTC derivatives. At that point exactly I felt a bit numb and I wished (unfortunately with no luck whatsoever) I had someone to guide me through the whole process and help me map the unknown territory. Once more I thought about my favorite quote , the one I had come across in one of MISYS's presentations, which said that

complying with EMIR is like shooting at a moving target

and at that very moment, I couldn't agree more. Once you set aside the nagging and the wishful thinking, you realise that, even if you hadn't done anything already, you have to plan your next steps quickly and according to what you know up to that moment, prepare your firm as much as possible in order to achieve compliance in a timely & cost effective manner. The fact that most firms are in the same status as you are, believe me, does not make you feel better, as you have no shoulder to lean on for help. Things get even worse when your affiliates expect you to show them the way. For those of you that were already prepared and have all the answers, I need to say that it's a pity I don't have your emails or phone numbers, they would prove most useful to me :) So, what do you do next? I suggest you start by asking questions.

Question1: What's your budget for Regulatory projects?

However strange this question may sound, due to the inevitability of regulatory projects, firms do not have inexhaustible budgets. The available cash and resources could limit your firm's options.

Question 2: How much business do you intend to take on ?

Will you only report for your own behalf? Do you wish to offer delegated reporting services to your clients? Are there any other dependent firms (affiliates) that expect you to do reporting on their behalf or act as a 3rd Party provider? If the answer to the last two questions is Yes, then your firm needs to reconsider the pros/cons and do a cost benefit analysis to determine what would be the best option for it. Have a low cost solution or increase the budget to accommodate for more business?

Question 3: Will you self-report or delegate? (Actually look at the answer of Q2)

The size of the business you wish to take on will determine your decision re your reporting options. You can choose to self report, fully or partly delegate to your counterparties or to 3rd Party providers. If it will be just you, the choice of delegating reporting to a 3rd Party provider seems more appealing as you don't need to change your whole infrastructure in order to produce the required report. You don't even need to connect with a Trade Repository. Your 3rd Party providers will do most of the burdensome work for you.  If you decide that you will act as a Reporting Entity for your clients or affiliates, then, if you haven't done any analysis so far on your infrastructure needs, I must say you are way behind schedule.

Question 4 : What are the criteria to be taken into account before choosing my 3rd Party Providers?

Question 5: What are the criteria to be taken into account before choosing my Trade Repositories?

Before going any further, I would very much like to hear your thoughts as well. Do you think there are more things to consider before reaching at this point? Feel free to share your comments. Maria L.