The UK EMIR Refit, One Year On: Key Lessons from FCA Market Watch 84

One year after the UK European Market Infrastructure Regulation (EMIR) Refit went live, the Thistle Initiatives Investments team unpicks Market Watch 84’s assessment of firms’ progress, and looks at next steps in the year ahead.

On 30 September 2025, the FCA published Market Watch 84, a joint publication with the Bank of England providing insight into the implementation of the UK EMIR Refit one year after going live. It sets out key observations on firms’ change management processes, vendor reliance, and the management of reporting errors and omissions.

The publication reinforces the FCA’s ongoing focus on the accuracy and completeness of regulatory data. It also outlines the next steps the regulator intends to take to strengthen reporting quality and supervisory oversight across derivatives markets.

Below, we explore the FCA’s findings, what they mean for reporting counterparties, and the actions firms should now be considering.

Understanding the UK EMIR Refit

The UK EMIR Refit came into effect in September 2024 and was introduced to enhance the transparency and quality of derivatives reporting. The reforms aimed to bring the UK framework into closer alignment with international standards while supporting systemic risk monitoring and financial stability.

Under Article 9 of UK EMIR, counterparties were required to report all derivative contracts to a registered trade repository (TR). The UK EMIR Refit introduced updated data fields, schema changes, and stricter reporting requirements. Firms were given an 18-month implementation period, with a six-month transitional window ending on 31 March 2025 for updating outstanding trades.

By the end of this transition period, 95% of all derivative reports had been successfully uplifted to meet the new requirements, demonstrating significant engagement. However, a small minority of firms still maintained non-uplifted trades beyond the deadline, resulting in breaches of their reporting obligations. The FCA has reiterated that all firms must ensure any remaining trades are uplifted without delay. The regulator’s message is clear: while transition periods offer flexibility, firms are still responsible for ensuring full compliance within the prescribed timeframe.

What does this mean for firms?

There are several key takeaways in the approach that the letter outlines which are useful for firms to be aware of:

1. Stronger expectations for change management: The FCA found that while the majority of firms transitioned successfully, approximately 19% experienced reporting challenges during implementation, and 1.45% entirely failed to report any derivatives under the new regime. The FCA attributed these issues primarily to inadequate resource planning and an over-reliance on key individuals, leading to late issue identification, compressed testing timelines, and insufficient remediation before the deadline.
   
   The FCA expects firms to allocate sufficient resource and governance oversight, as well as establishing clear procedures and documentation for managing EMIR-related system updates.
   
   
2. Over reliance on vendor reliance: A growing number of firms now rely on third-party vendors to fulfil their EMIR reporting obligations, with many vendors significantly increasing their reporting volumes since the Refit was established. While outsourcing can improve efficiency, the FCA has cautioned firms that the responsibility for data accuracy and completeness remains solely with the reporting counterparty. The FCA has emphasised that outsourcing reporting does not mean outsourcing responsibility. Instances of poor-quality submissions often stemmed from data mapping errors, enrichment issues, or schema logic defects within vendor systems. The FCA expected firms to have documented vendor oversight frameworks, with ongoing assurance testing of vendor-submitted date.
   
   Where vendors contribute to material errors or delays, firms remain responsible for notifying the FCA by submitting a breach notification.
   
   
3. Errors and omissions: underreporting of breaches: Since UK EMIR Refit went live, the FCA has received 267 breach notifications for reporting issues – far below what the FCA expected given trading volumes, peer data, and the number of known issues in related UK MiFIR transaction reporting regimes. While the FCA acknowledged the variations in governance thresholds, which may partially explain the low figures, it did not consider this as sufficient justification. The regulator expects material reporting errors or omissions to be promptly notified, with detailed background information to enable a full review of each incident.
   
   The FCA also clarified that Central Counterparty Clearing Houses (CCPs) should submit notifications to the BoE, whilst all other firms should notify the FCA directly via its EMIR Reporting Notification Form.
   
   It emphasised that firms must have clear internal procedures to identify, evaluate, and escalate breaches. Notifications should not be treated as one-off administrative tasks but as part of a broader governance process designed to assure data integrity.
   
   It has also stated that with the Refit now fully implemented, that it will increase its monitoring of breach notifications, with a focus on timeliness, quality, and volume to assess whether firms are meeting regulatory expectations.

What are the next steps?

Looking ahead, the FCA and Bank of England have set out four core priorities for the next phase of UK EMIR supervision with a focus on enhancing and completeness of derivatives data to enhance market transparency and systemic risk oversight. The regulators will:

1. Continue collaborating with industry to improve the completeness and accuracy of EMIR data.
2. Increase their focus on reconciliation rates between counterparties and trade repositories.
3. Monitor the timeliness and quality of breach notifications and follow up with firms failing to comply.
4. Assess systems and controls across firms to ensure they can accurately report, identify, and correct both live and matured trade data.

Market Watch 84 serves as a reminder that UK EMIR Refit compliance is an ongoing process, not a one-off project. The FCA expects counterparties to review their internal EMIR frameworks to ensure they have robust arrangements supporting these priorities, including governance over reconciliation processes and escalation pathways for reporting errors.

How Thistle Initiatives Can Help

At Thistle Initiatives, we assist firms across the financial services sector in meeting complex reporting obligations under UK EMIR, MiFIR, and other regulatory frameworks.

Our team supports clients in strengthening reporting frameworks, improving vendor oversight, and remediating identified data-quality issues. Whether you are looking to validate your EMIR controls, perform a post-implementation review of the Refit, or develop breach notification procedures aligned with FCA expectations, we can provide practical, proportionate, and tailored guidance.

If you’d like to discuss how we can support your firm in light of the new action plan, get in touch at info@thistleinitiatives.co.uk or call 020 7436 0630 to speak with our team.

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