Majority of UK firms unprepared for EMIR REFIT, Novatus finds
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Majority of UK firms unprepared for EMIR REFIT, Novatus finds 27 February 2023UK Reporter: Lucy Carter
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UK-based companies remain concerned about EMIR REFIT and its implementation, a recent report from regulation and ESG consulting services Novatus Advisory (Novatus) has found.
The ‘EMIR REFIT Readiness Report’ polled 100 market participants on their current plans for the new regulation, scheduled to come into effect in April 2024.
A lack of preparedness remains a crucial issue, with 21 per cent unsure of what will be needed for the regulation’s practical application. Only half of those surveyed believe that they have enough time to prepare for the implementation date.
The majority of firms (59 per cent) will comply with EMIR REFIT using an in-house approach, however 37 per cent of this group have no action plan in place and a further 3 per cent have not yet considered the requirements at all.
Under the REFIT, reporting fields will increase from 129 to 203. This inevitably increases technology concerns, with data reconciliation, will necessitate automated XML solutions. Compatible with ISO 20022, these platforms will heighten the complexity and scale of companies’ technology builds.
Firms who are unable to meet the implementation date put themselves at risk of remediation, by which they may lose significant amounts of money and time catching up with market and regulatory requirements. According to Novatus’ report, current EMIR regulation has already caused 90 per cent of firms to review or assess their reporting, with 76 per cent still experiencing remediation.
Matthew Ranson, partner and co-founder of Novatus, says: “Due to the vast number of changes the regulation is bringing, time is already tight for firms to be compliant. Remediation is clearly an issue that many respondents have faced under the current regime, and this is only set to become more of a problem if firms do not implement changes quickly. If firms are unprepared and don’t have technology in place, there is a real risk that remediation will be a considerable, and costly, long-term problem.”
Francis Stroudley, director and head of transaction reporting at Novatus, comments: “The need for external support and guidance regarding the implementation of EMIR REFIT is clear. This not only points to a need for a much wider ecosystem of providers across EMIR REFIT, but our research also demonstrates that many firms feel they don’t have the necessary expertise or headcount to deliver the changes brought about by the regulation.”
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