The European Market Infrastructure Regulation (EMIR) seeks to increase market transparency and reduce risks for OTC derivatives. The EMIR reconciliation process is notoriously complex, requiring asset managers to compare counterparty data with trade repository data.
The process helps ensure data provided by both parties is correct and consistent, which is of course essential for maintaining transparency and minimizing risk in the derivatives market. But it poses unique challenges for market participants, including:
- Data quality: Counterparties may report data that is inconsistent, erroneous, or incomplete, which can cause discrepancies during reconciliation. When there are significant amounts of data involved, it can be extremely challenging and time-consuming to identify and correct these errors.
- Manual processes: EMIR reconciliation frequently includes tedious manual processes, such as data entry and matching. Manual processes take a lot of time to complete, especially when dealing with large amounts of data. Moreover, these processes raise the risk of mistakes that may result in regulatory non-compliance and financial losses.
- Regulatory compliance: EMIR reconciliation is a legal necessity, and failure to comply will have serious financial and reputational repercussions. Given the intricacy of the process and the significant amounts of data involved, it can be very difficult for market participants to make sure they are fulfilling their EMIR requirements.
How the IVP Reconciliation Solution can help:
One way to solve all of these challenges simultaneously is with automation. The IVP Reconciliation Solution, for example, is a cloud-based platform that uses artificial intelligence (AI) and machine learning (ML) to increase the efficiency, accuracy, and flexibility of complex EMIR reconciliations. Here’s how:
The IVP Reconciliation Solution automates data validation and enrichment to help address data quality issues. To ensure data is accurate and consistent, it applies cutting-edge algorithms and AI to detect and repair problems automatically. This significantly reduces the time and effort needed for EMIR reconciliation while increasing data accuracy.
To overcome the challenges of manual workflows, the IVP Reconciliation Solution automates the entire reconciliation process, eliminating the need for manual data entry and matching. This can help accelerate EMIR reconciliation and reduce the risk of human errors.
The IVP Reconciliation Solution addresses regulatory compliance challenges as well. Its automated data validation, matching, and enrichment capabilities, along with detailed reporting and analytics, help ensure market participants meet EMIR obligations with confidence.
With the IVP Reconciliation Solution, market players can ensure EMIR reconciliations are precise, effective, and compliant — all while spending less time and effort.
Learn more about the IVP Reconciliation Solution and schedule a demo today.
This reconciliation solution uses AI and ML to increase efficiency, accuracy, and flexibility. It features “any-to-any” reconciliations, including bank reconciliation, and processes millions of transactions in minutes.
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