TITLE II

CLEARING, REPORTING AND RISK MITIGATION OF OTC DERIVATIVES

Reporting obligation
Article 9
1
Counterparties and CCPs shall ensure that the details of any derivative contract they have concluded and of any modification or termination of the contract are reported in accordance with paragraphs 1a to 1f of this Article to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than the working day following the conclusion, modification or termination of the contract.
The reporting obligation shall apply to derivative contracts which:
a
were entered into before 12 February 2014 and remain outstanding on that date;
b
were entered into on or after 12 February 2014 .
Notwithstanding Article 3, the reporting obligation shall not apply to derivative contracts within the same group where at least one of the counterparties is a non-financial counterparty or would be qualified as a non-financial counterparty if it were established in the
United Kingdom
, provided that:
a
both counterparties are included in the same consolidation on a full basis;
b
both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures; and
c
the parent undertaking is not a financial counterparty.
Counterparties shall notify
the FCA
of their intention to apply the exemption referred to in the third subparagraph. The exemption shall be valid unless the
FCA does
not agree upon fulfilment of the conditions referred to in the third subparagraph within three months of the date of notification.
For the purposes of this Article, counterparties shall be considered to be included in the same consolidation if they both meet either of the criteria set out in Article 3(3).
1a
Financial counterparties shall be solely responsible, and legally liable, for reporting on behalf of both counterparties, the details of OTC derivative contracts concluded with a non-financial counterparty that does not meet the conditions referred to in the second subparagraph of Article 10(1), as well as for ensuring the correctness of the details reported.
To ensure that the financial counterparty has all the data it needs to fulfil the reporting obligation, the non-financial counterparty shall provide the financial counterparty with the details of the OTC derivative contracts concluded between them, which the financial counterparty cannot be reasonably expected to possess. The non-financial counterparty shall be responsible for ensuring that those details are correct.
Notwithstanding the first subparagraph, non-financial counterparties who have already invested in a reporting system may decide to report the details of their OTC derivative contracts with financial counterparties to a trade repository. In that case, the non-financial counterparties shall inform the financial counterparties with which they have concluded OTC derivative contracts of their decision prior to reporting those details. In that situation, the non-financial counterparties shall be responsible, and legally liable, for reporting those details and for ensuring their correctness.
A non-financial counterparty that does not meet the conditions referred to in the second subparagraph of Article 10(1) and that concludes an OTC derivative contract with an entity established in a third country shall not be required to report pursuant to this Article and shall not be legally liable for reporting or ensuring the correctness of the details of such OTC derivative contracts, provided that:
a
that third-country entity would be qualified as a financial counterparty if it were established in the
United Kingdom
;
b
the legal regime for reporting to which that third-country entity is subject has been declared equivalent pursuant to Article 13; and
c
the third-country financial counterparty has reported such information pursuant to that third-country legal regime for reporting to a trade repository that is subject to a legally binding and enforceable obligation to grant the entities referred to in Article 81(3) direct and immediate access to the data.
1b
The management company of a UCITS shall be responsible, and legally liable, for reporting the details of OTC derivative contracts to which that UCITS is a counterparty, as well as for ensuring the correctness of the details reported.
1c
The AIFM shall be responsible, and legally liable, for reporting the details of OTC derivative contracts to which the relevant AIF is a counterparty, as well as for ensuring the correctness of the details reported.
1d
The trustees or managers of an occupational pension scheme (within the meaning given in section 1(1) of the Pension Schemes Act 1993) shall be responsible, and legally liable, for reporting the details of OTC derivative contracts to which that occupational pension scheme is a counterparty.
1e
Counterparties and CCPs that are required to report the details of derivative contracts shall ensure that such details are reported correctly and without duplication.
1f
Counterparties and CCPs that are subject to the reporting obligation referred to in paragraph 1 may delegate that reporting obligation.
2
Counterparties shall keep a record of any derivative contract they have concluded and any modification for at least five years following the termination of the contract.
3
Except where the FCA has suspended the reporting obligation under paragraph 3A, where a trade repository is not available to record the details of a derivative contract:
a
counterparties and CCPs shall ensure that such details are reported to the FCA; and
b
the FCA shall ensure that all the relevant entities referred to in paragraph 3 of Article 81 have access to all the details of derivative contracts they need to fulfil their respective responsibilities and mandates
3A
The FCA may suspend the reporting obligation in paragraph 1. Before it does so it must:
a
provide a report to the Treasury setting out its reasons for suspending the reporting obligation;
b
specify a date:
i)
on which the suspension of that obligation will end;
ii)
by which it anticipates counterparties and CCPs will be able to report details of any derivative contracts as set out in paragraph 3; and
c
consult the Treasury and the Bank of England.
3B
The FCA may, with the consent of the Treasury, suspend the reporting obligation under paragraph 3A for a period of up to one year or such longer period as the Treasury may by regulations specify.
3C
Details of any derivative contracts that counterparties and CCPs have concluded, and of any modification or termination of the contract, that have not been reported to a trade repository in accordance with the reporting obligation in paragraph 1 must be reported by those counterparties and CCPs to a trade repository following the end of the suspension of the reporting obligation in paragraph 3a by no later than the end of the period specified by the FCA for this purpose.
4
A counterparty or a CCP that reports the details of a derivative contract to a trade repository or to the FCA, or an entity that reports such details on behalf of a counterparty or a CCP shall not be considered in breach of any restriction on disclosure of information imposed by that contract or by any legislative, regulatory or administrative provision.
No liability resulting from that disclosure shall lie with the reporting entity or its directors or employees.
5
The Bank of England may make technical standards for CCPs, and the FCA may make technical standards for all other cases specifying the details and type of the reports referred to in paragraphs 1 and 3 for the different classes of derivatives. The reports referred to in paragraphs 1 and 3 shall specify at least:
a
the parties to the derivative contract and, where different, the beneficiary of the rights and obligations arising from it;
b
the main characteristics of the derivative contracts, including their type, underlying maturity, notional value, price, and settlement date.
6
The Bank of England may make technical standards for CCPs, and the FCA may make technical standards in all other cases specifying:
a
the data standards and formats for the information to be reported, which shall include at least the following:
1. global legal entity identifiers (LEIs);
2. international securities identification numbers (ISINs);
3. unique trade identifiers (UTIs);
b
the methods and arrangements for reporting;
c
the frequency of the reports;
d
the date by which derivative contracts are to be reported.
.........
Substituted by Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (Text with EEA relevance).
Inserted by Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (Text with EEA relevance).
Art. 9(3)-(3C) substituted for Art. 9(3) (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 19(2) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(4) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 19(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Art. 9(5) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 19(4) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(1) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(1) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2)(c)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(1) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2)(c)(ii) (with savings in S.I. 2019/680, reg. 11 ); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(1) inserted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2)(d) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(1a) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2A) (as inserted by S.I. 2020/1385, regs. 1(4), 67(3)(b)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Art. 9(1d) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(2B) (as inserted by S.I. 2020/1385, regs. 1(4), 67(3)(b)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(6) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(3)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 9(6) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416), regs. 1(3), 29(3)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)