REMIT reporting - novations
REMIT Reporting Database

 


 

 

If the contract is subject to a novation, this must be reported under the REMIT reporting scheme as an early termination of the previous trade with the old Unique Trade Identifier (UTI) and a new trade with a new UTI should be reported.

 

Both market participants have to submit an early termination report with Action Type "C" for Cancel the old trade and the new counterparties to the trade must report a new submission with Action Type "N" for the new trade between them with a new UTI.

 

The above approach to novations' reporting under REMIT has been acknowledged by ACER in the document Frequently Asked Questions (FAQs) on REMIT transaction reporting (see box).

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting

 

Question

 

Can you please clarify if the EMIR approach to Novations will be applied.

 

Scenario 1: Trade being fully novated

 

Will we be required to send a cancel/ exit for the trade (old UTI) against pre novation party and a 'new' submission for the trade (New UTI) against the new party? i.e. same UTI cannot be used post novation

 

Scenario 2: Trade to be split by Novation

 

Will we be required to send a modify (old UTI) for the trade remaining with the original party and a 'new' for the trade (New UTI) with new party?

 

Answer

 

In order to report a novation, an early termination with the old UTI and a new trade with a new UTI should be reported. Both market participants, MP1 and MP2 have to submit an early termination report with Action Type "C" for Cancel the old trade and e.g. MP1 and MP3 a new submission with Action Type "N" for the new trade between MP1 and MP3 with a new UTI.

 

Question

 

Can you please clarify if the EMIR approach to Novations will be applied.

 

Scenario 1: Trade being fully novated


Will we be required to send a cancel/ exit for the trade (old UTI) against pre novation party and a ‘new’ submission for the trade (New UTI) against the new party? i.e. same UTI cannot be used post novation


Scenario 2: Trade to be split by Novation


Will we be required to send a modify (old UTI) for the trade remaining with the original party and a ‘new’ for the trade (New UTI) with new party?


In order to report a novation, an early termination with the old UTI and a new trade with a new UTI should be reported. Both market participants, MP1 and MP2 have to submit an early termination report with Action Type “C” for Cancel the old trade and e.g. MP1 and MP3 a new submission with Action Type “N” for the new trade between MP1 and MP3 with a new UTI.
Novation of trades: MP 1 will rename itself and become MP 3 with all codes (ACER, LEI etc) from MP 1. Do we need to modify any trades or do we just need to change the data in CEREMP?


MP 2 will merge with MP 3 to one legal entity MP 3 which comprises the assets of former MP 2 and MP 3: do we need to early terminate trades for MP 2 and submit new trade reports for MP 3? Can we resubmit the complete trades under the merged company (MP 3) or do we actually need to split trades in delivered and undelivered segments? Are any differences between table 1 and table 2 to be taken into account?


Example: MP 2 has a deal with MP X (external party) for cal 2016. A merger between MP 2 and MP 3 takes place on August 1. Are the deals already reported and settled to be early terminated and submitted as new under MP 3? Does MP X to do the same?

Has MP X to be informed/asked to do the same?

 

Since we had already submitted a question to ACER previously and received no feedback as to now we would ask you to reply by June 3 in order for us to do necessary preparations.


If we do not receive a response from ACER we will proceed with our best effort: we will send early terminations for open trades for MP 2 and submit new reports for MP 3 without splitting the trades.

 

Answer


All the open trades have to be novated with the name of the new legal entity to notify the change of the counterparty to the contract. In order to report a novation, an early termination with the old UTI and a new trade with a new UTI should be reported.
Both market participants, MP2 and MPX have to submit an early termination report with Action Type “C” for Cancel the old trade and MPX and MP3 have to provide a new submission with Action Type “N” for the new trade between MPX and MP3 with a new UTI.

 

 

 

 

 

 

 

IMG 0744

    Documentation    

 

 

 

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting

 

 

 

 

 

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Last Updated on Tuesday, 18 July 2017 23:26
 

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