The effective date for new reporting obligations that the European Markets Infrastructure Regulation is going to impose on certain fund managers – 18 June – is fast approaching and, if those fund managers have not yet made the necessary arrangements, they should do so now.

Under EMIR, counterparties to derivative contracts, including Undertakings for the Collective Investment in Transferable Securities or UCITS and alternative investment funds or AIFs, must report details of those contracts to a trade repository – this is known as the EMIR reporting requirement. EMIR Refit amends EMIR in a number of respects including this requirement, shifting the responsibility for reporting the details of over-the-counter derivative contracts concluded by a fund from that fund to its UCITS management company or AIFM, as applicable.

It is important to note that fund managers only assume responsibility for reporting derivative contracts signed by their funds that constitute “OTC derivative contracts” as defined in EMIR. Therefore, starting on 18 June:

• a fund will remain responsible and legally liable for reporting details of derivative contracts executed on its behalf on an "EU regulated market" or a "third country market" that article 2a of EMIR treats as equivalent to an "EU regulated market"; and
• that fund’s manager will become responsible and legally liable for reporting details of all other derivative contracts executed on behalf of that fund and, in each case, ensuring the correctness of the details reported.

Next steps

Each fund manager must have taken all steps necessary to make it comply with its new reporting obligations by 18 June. This will require:

• an assessment of the categories of derivative contract transacted by each fund under its management to identify those in respect of which:
   ° the fund manager will assume; and
   ° the fund will retain,
responsibility for the EMIR reporting requirement; and
• where:
   ° the fund has delegated the reporting function with respect to derivative contracts to its counterparty or a third party service provider; and
  ° the fund manager wishes that delegate to continue to undertake that function after it assumes responsibility for the EMIR reporting requirement in respect of the fund’s OTC derivative contracts,
an assessment of the amendments required to be effected to existing delegated reporting arrangements to ensure that the delegate undertakes the reporting function in respect of the fund or fund manager, as applicable, in respect of the relevant derivatives contracts.

* Judith Lawless can be reached on +353 1 607 1256 or at judith.lawless:mccannfitzgerald.com; Mark White can be reached on +353 1 607 1328 or at mark.white@mccannfitzgerald.com; Iain Ferguson can be reached on +353 1 607 1414 or at iain.ferguson@mccannfitzgerald.com; and Tony Spratt can be reached on +353 1 607 1367 or at tony.spratt@mccannfitzgerald.com