Kinetic Partners has launched a checklist for the implementation of the European Markets Infrastructure regulation (Emir), aimed at helping firms gain a firmer indication of how their systems will cope with the new rules.

Emir will require firms to report all derivative contracts to the regulator and also establish common reporting standards across the industry.

The checklist will focus on two key areas that firms are struggling with, including regulatory challenges and operational challenges.

In identifying several critical action items for establishing effective Emir reporting processes, the overview document will outline how firms’ systems might manage processing all the new transaction data.

Management teams will then be able to focus resources on the areas where they are most needed. As with all reporting of transactions, it is an area of regulation where focus and prevention, are far better than cure.

Simon Appleton, director, markets centre of excellence, at Kinetic Partners, said: “We have developed this checklist to give firms a snap shot of their progress towards being compliant with Emir reporting.

"From our work with clients we have picked up on a number of operational and regulatory challenges, including larger banks’ fears over the complexity of the reporting and sheer volume of accurate data needed and smaller firm’s apprehension that they do not have the internal capacity and infrastructure support to manage the changes.

"Our Emir checklist is designed to be used by firms of all sizes as they tighten their systems and controls over the coming months.”

Monique Melis, global head of consulting, Kinetic Partners, added that reporting has evolved since her time as head of the UK Financial Services Authority's (FSA) transaction reporting unit, with the financial markets, products, technology and global trading becoming increasingly complex and diverse.

“As a result of the 2008 financial crisis, Emir trade reporting was born and will be a key tool for monitoring risk in the derivatives space. The sheer amount of data fields and events which need to be reported means the report itself has to be more complex.”