The next level of reporting under the European Market Infrastructure Regulation, which covers central clearing, goes live next month and should aid readiness for new regulations coming into force next year.

Emir came into force in December 2014 with an inbuilt review by the European Commission to look at whether changes were required to the reporting process. There were further revisions to the reporting process in April 2015 and the next changes come into force on November 1 2018.

One change is that the European Securities and Markets Authority has made it compulsory for firms to report their transactions with a valid legal identity identifier, LEIs are also mandatory for all entities trading with European counterparties across all asset classes under MiFID II, the regulations covering European financial markets that go live on 3 January 2018.

Mahima Gupta, senior manager at consultancy Sapient Global Markets, told Markets Media: “The Emir 3 changes are aligned with MiFID II and will have a positive impact on readiness for MiFID II.”

This month Esma published a briefing on the LEI and the regulator said it expects market participants to take all necessary steps to ensure full compliance with the LEI requirements under MiFID II.

“Based on its previous experience with Emir reporting, Esma urges reporting entities not to delay in addressing this important matter, as advance preparation will help in avoiding backlogs and ensuring that all market participants are ready for the new regime,” added the regulator.

Today the UK Financial Conduct Authority fined Merrill Lynch £34.5m ($45m) for failing to report transactions under Emir. The regulator said: “This is the first enforcement action against a firm for failing to report details of trading in exchange traded derivatives, under Emir, and reflects the importance the FCA puts on this type of reporting.”

Merrill Lynch agreed to settle at an early stage of the investigation and received a 30% reduction in their overall fine, which would have been £49.3m.

Mark Steward, FCA executive director of enforcement and market oversight said in a statement: “It is vital that reporting firms ensure their transaction reporting systems are tested as fit for purpose, adequately resourced and perform properly. There needs to be a line in the sand. We will continue to take appropriate action against any firm that fails to meet requirements.”

Gupta continued that Esma has also made changes to Emir reporting to ensure consistency across the industry, for example, by aligning with ISDA best practices on which counterparty generates trade identifiers. She said: “Esma has been proactive and clear in its thought process in aligning reporting reporting requirements.

A report from the The European Post Trade Forum (EPTF) this summer had said the European Commission should set a high priority on addressing the lack of harmonization across multiple post-trade reporting requirements in the region as this hampers investment.

The Commission set up the EPTF last year as an informal expert group from across the market to look at post-trade issues including collateral markets and derivatives with the aim of supporting the Capital Markets Union. The EPTF said  multiple post-trade reporting requirements increase the cost of reporting and the complexity of data analysis and set a high priority on the European Commission developing a harmonized and simplified reporting package.

Patrick Pearson, head of unit, financial markets infrastructure, DG FISMA at the European Commission, said in a speech at the ISDA Annual Europe Conference last month that reporting needs to be streamlined, especially for corporates.

Pearson said: “We can do better as the regulatory desire is economic ease. That is why single-sided reporting is a goal and there needs to be more sensible requirements for non-financial corporates.”

Emir requires both sides of a trade to report transactions to repositories, where they are meant to be reconciled. However, market participants have said that double-sided reporting does not add any value and has pushed for single-sided reporting.

However Carole Uzan, deputy head – market regulation division, at the AMF argued at the ISDA conference that the French regulator supports double-sided reporting because it enforces market discipline