The updated EMIR Q&As version of 4 April 2016 includes a new ESMA's clarification regarding the population of the "Clearing obligation" field in the EMIR trade reports.
The issue relates to the Field 28 Table 2 as specified in the Annex to the Commission Delegated Regulation (EU) No 148/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards on the minimum details of the data to be reported to trade repositories (OJ L 52, 23.02.2013, p. 1).
ESMA explains how the description of the field should be interpreted, how it should be populated during the frontloading period and how long the counterparties are allowed to report value "X" (standing for "not available").
ESMA Q&As on EMIR
TR Question 42 [last update 4 April 2016]
Population of the field Clearing Obligation
a) The description of the field "Clearing Obligation" reads: "Indicates, whether the reported contract is subject to the clearing obligation under Regulation (EU) No 648/2012".
Should all the contracts pertaining to the asset class subject to the clearing obligation be flagged in this field as subject to the clearing obligation?
b) How should the field "Clearing Obligation" be populated during the frontloading period?
c) How long is it allowed to report "X" in the Clearing Obligation field?
TR Answer 42
a) No. The field "Clearing Obligation" should be populated with "Y" only if a specific contract is subject to the clearing obligation, meaning that
(i) the contract pertains to one of the classes declared as subject to the clearing obligation and
(ii) the contract is concluded between the counterparties that are subject to the clearing obligation as of the time of execution of the contract.
b) Contracts that are entered into during the frontloading period (please see the graph below) and will have, at the date of application of the clearing obligation for that contract, a remaining maturity higher than the minimum remaining maturity specified in accordance with Article 5(2)(c) of EMIR should be flagged with "Y" in the Clearing Obligation field.
These contracts are subject to the clearing obligation from the moment the contract is entered into, even if the counterparties will effectively be required to clear them only at the date when the clearing obligation takes effect.
c) Until the beginning of the frontloading period for Category 1 counterparties there will be no contracts pertaining to the given classes of OTC derivatives that are subject to the clearing obligation, therefore it is considered that counterparties should report "X".
Upon the beginning of the front-loading period for Category 1 counterparties, all the counterparties shall report either "Y" or "N" for the contracts pertaining to the given classes.
The example below illustrates how the field should be populated by the Category 1 and Category 2 counterparties for the contracts pertaining to the classes in the scope of Regulation (EU) 2015/2205.