Financial reporting requirements around trading instruments are crucial for compliance. However, when it comes to cryptocurrencies, this becomes complex.
Post-trade reporting requires a timebound publication of all trade-related data to regulators. The methods and technicality vary with asset classes. For Europe, these reporting requirements were defined under the EMIR and MiFIR regimes.
However, cryptocurrencies are an oddball to this system. These instruments came into existence a little more than a decade ago but have caught mainstream attention in recent years. Despite the global popularity of cryptocurrencies, regulations around them are still murky.
The lack of a proper definition of cryptocurrencies and its clarification have kept the requirement of their post-trade reporting out of the regulatory jurisdiction. However, the same does not apply to crypto derivatives, the instruments which are now listed on several mainstream trading venues.
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Ron Finberg, Director of Global Regulatory Reporting Solutions at IHS Markit
“The main post-trade regulatory reporting requirements are for crypto derivatives that fall under existing derivative reporting regulation such as EMIR in the EU/UK, CFTC
CFTC
The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commission. These are today the largest regulators and authorities in the United States. The Commission works to guarantee that trading on the U.S. futures exchanges are fair and honest and maintain integrity…
