The European Securities and Markets Authority has fined Regis-TR €56,000 and issued a public notice, for failing to provide regulators with sufficient direct and immediate access to details of derivatives contracts.
The European Markets and Infrastructure Regulation (Emir) requires trade repositories (TRs) to provide such data to regulators, Esma noted.
"This is a key requirement to improve transparency and facilitate the monitoring of systemic risks in the derivatives markets," it said in its statement on the matter.
Regis-TR can appeal against the decision to the Board of Appeal of the European Supervisory Authorities. An appeal per se does not suspend the supervisory action, although the Board can suspend the application of Esma's decision according to Article 60(3) of the Esma Regulation.
Emir reporting obligations started in February 2014. From then through to October 2016, Regis-TR failed to "put in place systems capale of providing regulators direct and immediate access to derivatives data."
In particular this affected:
- 85.5% (3.7 billion) of Regis-TR's data on trade terminations and 1.6% (15 million) of data on trade modifications; and
- 100% (2.9 billion) of Regis-TR's data on trade valuations and 100% (22 million) of data on collateral updates.
Crucially, Esma found negligence in the approach of Regis-TR, which led to the fine being applied. The size of the fine was determined by both "aggrevating and mitigating factors provided for in Emir".
Regulation EU No 648/2012 (Emir) requires TRs to centrally collect and maintain the records of derivatives. Under Regulation No 2015/2365, on transparency of securities financing transactions and of reuse and amending Emir (SFTR), TRs centrally collect and maintain records of securities financial transactions (SFTs).
"TRs play a central role in enhancing the transparency of derivative markets and securities financing markets and thus of the financial system," states Esma.