a) Trades open before outage and remain open during outage:

Status: Best Practice Finalised, Last Updated: 15/02/2024

Question:
a) Trades open before outage and remain open during outage:

As best practice when submitting any back reporting agree the Reporting Date bilaterally with your cpty so T or T+1. Trades not sent at the same time and date will not pair and match, not hit the TSR or be presented for reconciliation.

1. The backlog of new trade reports will automatically be recorded in the first Trade State Report via the first reported NEWT to be compiled after resumption of service.

2. The first NEWT report with no subsequent lifecycle events and with an historic ED - Event Date and a current RD - Reporting Date will populate the TAR report, the TSR report and trigger the pairing & matching process and be presented for reconciliation.

3. Lifecycle events would not have been sent on trades that were open prior to the outage and remain open during the outage.

4. Where full lifecycle events in chronological order can be replayed by current systems then firms can make that decision and bilaterally agree this with their cptys.

5. Upon lifecycle events being reported via a MODI or CORR action type and where the ED - Event Date is greater than +1 day prior to the RD - Reporting date this will hit the TAR report. This is an example where the trade could pair (pairing both cptys to one UTI - as driven by the initial NEWT) but not match (checking the fields for validation) and thus not reconcile. You cannot get to matching & reconciliation via hitting a TAR report only a TSR report.
- Historical event dates on MODI will be ACK’d as long as the modification is not on a maturity date.
- Only MODIs that meet the T+1 event timeframe will be reflected on the TSR/Reconciliation reports; those that do not meet the requirement will not update TSR/Reconciliation.
- Any historical MODIs to update maturity date would not be ACKNOWLEDGED; the T+1 event date logic is required here.

6. Where alternative reporting system methods are used, maybe best to report the first NEWT with no subsequent lifecycle events as this updates the TSR and then each day on-going where internal systems allow for a daily MODI or CORR this will update the TSR report automatically.

7. However, where systems do not allow for a daily MODI or CORR action type firms will have to manually effect a MODI or CORR with the latest ED - Event Date and RE - Reporting Date. This "rectifier" MODI/CORR action will update the TSR and trigger the pairing & matching process and be presented for reconciliation. This also is mentioned under ESMA Q&A 6(a)) this is where the latest is greatest statement comes to life.