EMIR Refit | Navigating the Details

Reporting Tracking Number - Major Discussion Point

Report Tracking Numbers (RTNs) are transaction-level identifiers disseminated to both counterparties—buyer and seller—by a trading venue. RTNs are execution-level identifiers used to identify reports relating to the same execution.

ESMA emphasises that the RTN is not a one-to-one link with a TVTIC (Trading Venue Transaction Identification Code) and trades executed on Systematic Internalisers (SIs) do not require an RTN. Additionally, Best Practices dictate that RTNs should not be the same as the Unique Transaction Identifier (UTI), as this could cause significant confusion for various reasons.

Qomply's conversations with trading venues have revealed varying approaches to constructing the RTN. Some venues are opting to concatenate their LEI number with their current TVTIC to construct the RTN. Other venues are devising alternative methodologies, creating entirely new RTN numbers different from past transaction identification numbers. Some venues are even removing a digit or character at the end to form the RTN.

Concern Across Industry - Timing is Everything

One major concern is the timeliness of the availability and transmission of the RTN to counterparties with reporting obligations.

RTNs are provided by investment firms, clearing members, or CCPs to reporting counterparties. These reporting counterparties then disseminate the RTNs to their own counterparties to fulfill downstream reporting obligations. The transmission of the RTN through various entities in the reporting chain is fraught with complications.

Adding to the complexity, some transactions may have multiple legs with multiple RTNs, and there is no mechanism in place to determine which RTN the counterparty should choose.

Furthermore, since the RTN is a reconciled field, counterparties need to agree on which RTN to select, as the field needs to match.

Adoption of Best Practices

Industry working groups have addressed the timeliness issue by agreeing to use "RTNNotProvided" in the RTN field if the RTN is not available at the time of reporting. The FCA, jointly with the Bank of England, recently published guidance formalising this approach:

Our expectation is that entities generating RTNs, or providing RTNs to entities responsible for reporting, will make the RTN available in a timely manner so entities responsible for reporting can meet their UK EMIR reporting obligations. Where a RTN is not available at the time of reporting, entities responsible for reporting may populate the Report Tracking Number field (Table 2, Item 2) with 'RTNNotProvided' but should update it with the RTN as soon as practicable once it becomes available.

The FCA continues to clarify the requirement of an RTN with the following guidance:

The UK EMIR Validations Rules only require a RTN for derivatives executed on UK trading venues and do not permit the reporting of RTNs for derivatives not executed on UK trading venues.

While the agreement to use "RTNNotProvided" in the RTN field addresses timeliness issues, and the use of the RTN for UK venues only is clarified, the issue of which RTN to choose when transactions have multiple legs remains unresolved. This topic is still under discussion with regulators and industry bodies.