Summer vibes in the Reporting Regulations’ pool

According to the European Commission’s regulatory fitness and performance programme (“REFIT”) some (if not all) of the legislative acts must be periodically reviewed and amended if needed.

Now, it is the EMIR Regulation, which has been recently “REFIT”-ed and most of the new concepts are already effective since 17th of June 2019.

In general, they are refining definitions and counterparties’ interrelations, but among those there is one that concerns the reporting – the EMIR’s REFIT removes the obligation to report old derivatives transactions (“backloading”), unless explicitly requested by an NCA.

The table below summarises the changes, gives a short description and indicates the date of validity.

 

Amendment

Description

Effective date

FC definition

Alternative investment fund (AIF) which is either established in the EU or managed by an alternative investment fund manager (AIFM) authorised or registered in accordance with AIFMD and the Central securities depository (CSD), shall be considered as Financial counterparties (“FCs”)

17 June 2019

New FC category

EMIR REFIT introduces a new category called “small FCs”.

Whether an FC will be considered “small” or “big” FC will depend on the volume of its OTC derivatives.

17 June 2019

Clearing threshold calculation

clearing threshold calculation for NFCs to be aligned to that for FCs

17 June 2019

Mandatory clearing timing

amends the date on which the entities are required to clear certain derivative contracts (subject of entity type)

17 June 2019 (phase-in)

Pension schemes clearing exemption

EMIR REFIT extends the provisional exemption from the clearing obligation for certain pension scheme arrangements until 18 June 2021

17 June 2019

Backloading

The reporting obligation in respect of old derivative transactions (so-called “backloading” is in principle removed in the EMIR REFIT.

17 June 2019

Intragroup transactions

The reporting obligation does not apply to derivative contracts within the same group where at least one of the counterparties is an NFC or TCE NFC

17 June 2019 (NCAs consent)

Reporting responsibilities

The reporting requirements for NFCs when trading with FCs are transferred to the FC

18 June 2020

Clearing obligation

ESMA may request the EU Commission to suspend the clearing obligation for specific classes of OTC derivatives or for a specific type of counterparty

17 June 2019

Initial margin

CCPs must provide a simulation tool to their members in order to calculate and control the amount of additional initial margin

18 December 2019

Insolvency laws

EU member states’ national insolvency laws will not conflict with the CCPs obligations

18 December 2019

Risk Management

EMIR REFIT suggests ESA produce a regulatory technical standard for risk-management procedures

tbd in the RTS

Clearing services

Clearing Members to provide services under fair, reasonable, non-discriminatory and transparent commercial terms (“FRANDT”), including conflicts of interest management

18 June 2021

 

 

The EMIR REFIT comes only a few months after the SFTR reporting received its green light from the European Commission and shows that the regulations are constantly evolving, requiring market participants to adapt accordingly.

 

For more information, assistance or guidance about any of the reporting regulations, please do not hesitate to get in contact with us.

Application Management at Be TSE GmbH

The Application Management process guides how business applications are developed, managed, improved, and when necessary decommissioned.

 

Specific challenges arise in the application management of capital markets standard software packages, which lead to high costs and risks:

  • Continuously high need for change (time to market requirements, need to increase operational efficiency, regulatory pressure) combined with very high requirements regarding stable operations
  • Very specialized skill requirements, due to common use of very specific and highly customizable standard software packages.
  • Flexible team size requirements – minimum team sizes are necessary to deal with support requirements (cover business hours), while team size peaks occur regularly in particular in context of release upgrades.

 

In addition to this, Application Management includes usually production environment related tasks – hence compliance is an issue since externally performed tasks might be considered as an essential outsourcing according to MARisk.

In order to simplify auditing procedures for the financial institutes, an option for service institutes is to go for ISAE3402 – “International standard on Assurance Engagements (ISAE) No. 3402, Assurance Reports on Controls at a Service Organization”.

According to http://isae3402.com/ISAE3402_overview.html, “ISAE 3402 was developed to provide an international assurance standard for allowing public accountants to issue a report for use by user organizations and their auditors (user auditors) on the controls at a service organization that are likely to impact or be a part of the user organization’s system of internal control over financial reporting.”

Be offers application management services in shared service centers, comprising a highly skilled and flexible team, clearly defined services and processes, and in particular compliance via an ISAE3402 proven internal control system.

Our service model comprises of standardized processes, which are in the transition phase tailored to the needs of the client. A regular process review ensures that they fit to current needs.

 

Our Internal Control System (ICS) is derived from a risk analysis of the service, e.g. covering process risks, and is the basis of quality and compliance. We elaborate a detailed Risk Control Matrix, which is afterwards the base for defining Controls of our ICS and for creating an ICS Monitoring plan.

An ISAE report, stating the adequacy of controls and showing also the effectiveness of implemented controls, has been created for parts of our run services recently.

Be is offering services for many standard capital markets software packages. Be has a proven track record of successful projects and application management services delivered. We provide specific assets, in particular related to efficient automatic testing, to deliver an outstanding service quality with a highly competitive price. The service delivery can either be performed onsite at the client premises or in one of our service centers (e.g., in Magdeburg, Warsaw, Milan or Lisbon).

Be has a standardizes service transition model to guarantee a successful take-over of application management services, in an incremental way.

Finastra’s market-leading treasury solution now offered as a fully managed service in the cloud

Fusion Treasury (previously known as Fusion Kondor) in the cloud, delivered by regional partner BE TSE GmbH, will help treasurers make better decisions, faster.

Frankfurt, Germany, 1st July 2019. BE TSE has launched Finastra’s Fusion Treasury, its market-leading treasury solution, as a fully managed service in the cloud. Deployed on Azure, Microsoft’s enterprise-ready trusted cloud platform, Fusion Treasury will help financial institutions reduce time to market, increase profitability and risk management whilst keeping in line with changing markets and regulatory demands. The solution, previously known as Fusion Kondor, will be offered to financial institutions and corporates in the DACH region. It is provided and managed by regional partner BE TSE GmbH, a consulting firm specialized in capital markets, IT infrastructure and systems integration for the financial sector in Europe.

 

Pedro Porfirio, Head of Capital Markets at Finastra, said, “Fusion Kondor has been a key product for treasurers in financial services for many years. But with changing environments, it’s time for us to offer our customers this market-leading product in the cloud, allowing them to embrace the benefits it offers such as increased efficiency, speed and flexibility, whilst lowering costs. Being in the cloud will also give our customers access to further innovation through our open platform FusionFabric.cloud. Partnerships are a fundamental part of helping our clients along their transformation journey. BE TSE GmbH’s long-standing experience in the region means that they will be able to provide our customers with close support for the delivery and operations for a smooth transition to the cloud.”

 

Fusion Treasury is a single, integrated, front-to-back solution, built to cover all aspects of a bank’s operations in treasury, capital markets, derivatives, and risk and compliance. The solution enables financial institutions to integrate and automate systems and streamline treasury operations. By moving to a cloud technology, customers will be able to reduce time-to-market and scale more effectively. Fusion Treasury in the cloud can be implemented within one week and users can quickly take advantage of the pricing functions, compliance and reporting modules.

 

Rüdiger Borsutzki, CEO at BE TSE GmbH said, “We have been working with banks in the DACH region for years and we know that Finastra’s treasury solution will offer a great alternative for financial institutions that do not want to increase their IT footprint but want to take a step up on their operations. Our team of experts have over 20 years’ experience and will offer technical support, technical upgrade services and premium functional support to Finastra customers. Financial institutions can now focus on what really matters – their customers – relieving them of IT burdens.

 

For more information please contact info@be-tse.de or call us at +49895173970