EMIR data quality has improved over the last five years according to the European Securities and Markets Authority (ESMA).
ESMA’s follow-up report to 2019’s review into European Market Infrastructure Regulation (EMIR) data quality has outlined how national regulators in Cyprus, Germany, France, Ireland and the Netherlands have made “structural, long-lasting” improvements, under a data provision framework established by ESMA.
ESMA points to a fall in discrepancies in the number of reported outstanding derivatives at the trade level between two counterparties since 2021, as well as a decline in the percentage of late valuations, as evidence that that data quality “has been evolving positively thanks to the increased continuous focus and initiatives taken.”
In 2022, the regulators and the supranational body enhanced data quality monitoring efforts, and the national bodies implemented data quality dashboards, more granular data quality checks, and began using EMIR data in their day-to-day supervisory efforts.
ESMA also developed a data quality dashboard, including a set of 19 tests to monitor EMIR data quality, allowing it to monitor any improvements or decline in the EMIR data quality both at EU and national level.
All of the above has led to “observable results and improvements in EMIR data quality,” the follow-up report noted.
Market data quality was designated as a Union Strategic Supervisory Priority (USSP) by ESMA in 2020, a mechanism which allows ESMA to prioritise action taken by National Competent Authorities (NCAs).
EMIR came into effect in 2013 and was designed to address the risk associated with the lack of transparency in derivative contracts, which can create “a complex web of interdependence”. The poor quality of EMIR data, however, was hampering efforts by regulators to identify and assess risk, ESMA said.
©Markets Media Europe 2024
