EMIR Refit Reporting: ISO 20022, UPI and Data Reconciliation Demands

Just as financial institutions were getting a handle on a raft of trade and transactions rewrites (not least the CFTC Rewrite and regime changes for ASIC, JFSA, and MAS), ESMA came along with big news: EMIR Refit 2024. The Refit mandates the ISO 20022 messaging format and unique product identifiers (UPI). It also introduces technical requirements around XML schema, identifier fields, reconciliation and validation rules. 

EMIR Refit introduces new reporting and data management requirements for financial and non-financial counterparties (NFCs), trade repositories (TRs) and other competent authorities.

Firms must now submit reports in ISO 20022 XML format and validate UPIs against ANNA DSB. These requirements come with strict non-phased regulatory technical standards (RTS), requiring firms (including tier-1 institutions) to align with expanded reporting obligations. The changes include:

• 74 additional fields for reporting
• UPI mandates and validation rules
• Link-ID fields for compression activities and package trades
• New lifecycle events with revised action type classifications
• Stricter data reconciliation rules

Firms are also required to identify and correct errors within seven days and upgrade all outstanding derivative contracts to Refit standards within six months of implementation.

Unlike single-sided CFTC Rewrite reporting, EMIR Refit requires firms to develop a thorough understanding of counterparties’ reporting obligations and comply with revised XML validation rules

With EMIR Refit, ESMA has imposed stricter data quality requirements to ensure trade and transaction reporting is accurate, complete and consistent. The framework builds on ISO 20022 data standards, first introduced under the Securities Financing Transactions Regulation (SFTR), now expanding them with additional requirements.

To improve data integrity, ESMA mandates:

• Inter-TR data reconciliation to verify consistency across trade repositories.
• Expanded collateral fields to improve reporting granularity.
• Valuation reconciliation to ensure uniform risk assessment.
• Standardized end-to-end reporting in ISO 20022 XML for long-term data compatibility.

By enforcing these standards, ESMA aims to reduce systemic risk and enhance cross-market transparency. As a result, financial institutions must refine their data governance frameworks and strengthen reconciliation processes to meet these heightened regulatory expectations.

“EMIR Refit reinforces ESMA’s commitment to data quality, requiring firms to meet strict accuracy, reconciliation and validation standards under the ISO 20022 framework."

UPI: A complex (and potentially expensive) mandate

Under EMIR Refit, firms must now register, source and verify unique product identifiers (UPIs) for newly traded derivatives within the T+1 reporting deadline. Unlike unique transaction identifiers (UTIs), which counterparties can exchange or share, there is no such mechanism for UPIs. This means firms must independently source UPIs, potentially adding costs and operational complexity to the reporting process.

Without a direct UPI subscription, firms must rely on broker-dealer counterparts or end-of-day ANNA DSB files to obtain the required data. This can create delays, particularly for smaller firms that lack direct access to reference data services. The added compliance burden increases the need for automated data validation and reporting systems that can manage UPI sourcing and integration efficiently.

EMIR Refit introduces significant data management complexities. The shift to ISO 20022 XML messaging and expanded reporting fields creates several operational hurdles, including:

• Data completeness: Ensuring all mandatory fields are correctly populated for every eligible transaction. The new XML format introduces repeatable fields and optional elements that add complexity.
• Data-quality monitoring: Banks must establish robust risk and control frameworks to detect reporting inconsistencies.
• Data versioning: New action and event types increase the need for accurate version control, particularly for backloading outstanding contracts.

Managing trade-state, transaction activity and reconciliation reports requires scalable technology. Institutions that fail to modernize their data validation, error correction and reporting frameworks risk operational inefficiencies and compliance failures under the EMIR Refit mandate.

Firms navigating EMIR Refit must also contend with the CFTC Rewrite Phase 2 and other global reporting mandates, creating a significant operational burden. The simultaneous implementation of ISO 20022 messaging, UPI requirements and updated validation rules forces financial institutions to allocate resources across multiple regulatory change programs.

"The simultaneous rollout of EMIR Refit, the CFTC Rewrite and other global mandates forces firms to rethink their regulatory strategies, invest in scalable reporting solutions and enhance automation to mitigate compliance risks."

Navigating FCA and ESMA divergences

Moreover, the EU and UK EMIR Refit timelines do not fully align, requiring firms to operate under parallel reporting frameworks. With the Refit already in effect and the Financial Conduct Authority (FCA) Refit set to follow six months afterward, financial institutions must maintain both legacy EMIR formats and the new Refit standards simultaneously.

This dual reporting requirement increases operational complexity and compliance risks. Firms must ensure data consistency across jurisdictions while adapting to evolving technical standards.

With EMIR Refit now in effect, firms must continue refining their compliance strategies to meet changing regulatory expectations. The complexity of new reporting mandates, multi-jurisdictional differences and data quality requirements makes it critical for financial institutions to continually assess their reporting frameworks and reconciliation capabilities.

Implementing a jurisdiction-agnostic trade and transaction reporting solution that natively supports ISO 20022, UPI handling and automated reconciliation can help firms manage compliance more efficiently. By taking a strategic approach to regulatory reporting, institutions can not only adapt to the latest EMIR Refit requirements but also futureproof their reporting infrastructure against ongoing regulatory changes around the globe.