Highlighting variations between US and Europe and the negative impact on market participants
Clarus Financial Technology, which provides content, data and analytics for derivatives markets is pushing for greater debate around the format and extent of data made public on reporting under EMIR. Responding to the recent ESMA consultation paper on Article 9, Clarus highlighted the significant variation between the data available in the US and Europe, and the negative impact this is having on market participants.
“One of the key objectives of EMIR was to create a transparent environment in which companies can access trade information vital to their trading and hedging requirements” commented Clarus CEO, Amir Khwaja. “But the scope and frequency of data available publicly in Europe means it has little value in terms of analysis. Trade Repositories in Europe publish only high-level aggregated totals that are not broken down into actionable data. In contrast, the US data is more frequent and more granular, meaning that we can provide detailed analysis informing both pre- and post-trade processes.”
“The regulations emerging as a result of Dodd Frank in the US and EMIR in Europe were largely developed in parallel” added Khwaja. “This meant that it was very difficult to work on the principles of best practice as both jurisdictions had to meet tight deadlines. This consultation provides the opportunity to review that and work towards greater consistency of approach along best practice lines. We are encouraging ESMA to reconsider the current position whereby publicly available data in Europe is very limited, published only weekly and on an aggregated basis.”
“There is no doubt that publication of data in Europe on similar lines to the US would significantly expand the benefits,” concluded Khwaja. We have provided ESMA with a comparison of the analysis currently possible using publicly available data in Europe and the US. The window into US data provided by our products SEFView, SDRView and SDRFix creates a cohesive database for users to interrogate with our custom interface. As a result market participants can take advantage of the greater transparency of price and volume data to improve price discovery and risk mitigation. The same benefits should be applying to the European market, but currently are not. This needs to change.”