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March 16, 2020

Is your firm or fund an NFC-? EMIR Reporting Starts in June 2020

EMIR Refit defined a new category of firm the NFC- who are obliged to start trade reporting in June 2020

EMIR Refit is the EU update to EMIR which rolls out changes to the original EMIR text. One area of focus is a new class of financial firm the Non-Financial Counterparty "NFC-". An NFC- is a small financial counterparty which will be exempt from the clearing obligation but in-scope for UMR and from June trade reporting.

What is an NFC-?

First you need to measure your month end aggregate notional or AANA every month for all cleared or uncleared OTC transacitons. A firm or fund qualifies as an NFC- if during the past 12 months yuor AANA is beneath all of these thresholds:

  • Credit derivatives €1bn
  • Equity derivatives €1bn
  • Interest rate derivatives €3bn
  • FX derivatives €3bn
  • Commodity derivatives and all others €3bn

If your firm/fund goes over any of these thresholds in the previous twelve months then you become an NFC+ and different regulations apply. Firms should have been measuring their AANA from 17th June 2019 in preparation for the effective date on 20th June 2020.

From the 20th of June an NFC- must choose whether to take responsibility for trade reporting itself or oblige its FC counterparties to report on its behalf. In the latter case the NFC- must provide all necessary information to the FC required to complete the reporting obligation.  This background sets the context for a detailed ISDA note on the data required by an FC from the NFC- to achieve trade reporting. The note also discusses which transactions are in scope and how the two firms make decisions on Trade Repositories in the future.

More information:

  • A detailed explanation of Refit and FC- obligations: https://www.macfarlanes.com/what-we-think/in-depth/2019/emir-refit-what-you-need-to-know/
  • An ISDA note on the data required from an NFC- to enable their FC to report: https://www.isda.org/2020/03/13/emir-refit-fcs-reporting-on-behalf-of-both-itself-and-nfc-clients-operational-considerations/
  • Opinion piece from David Nowell at Kaizen: https://www.kaizenreporting.com/emir-refit-white-elephant/

Photo by Hans-Peter Gauster on Unsplash


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