34. According to the Article 9(1e) of EMIR, as amended by EMIR REFIT, counterparties and CCPs should report correctly and without duplication. The correctness of reported data is verified on two levels. Firstly, the minimum data quality requirements are ensured by the validation rules at the moment of data submission. Secondly, reconciliation process identifies possible content errors by comparing both sides of the reported derivative contract.

35. Both levels of verification of correctness currently have certain shortcomings which became apparent to NCAs based on their experience with supervision of reporting.

36. With respect to validation of the report, the NCAs receive from the TRs rejection statistics informing about the number of submitted and rejected reports. However, in the case of reporting issues that prevent the counterparty from sending the reports to the TR, NCAs currently do not receive any information about failure to comply with reporting obligation, unless such failure is communicated by the counterparty on a voluntary basis.

37. With respect to the reconciliation process, if the reports made by two counterparties with respect to the same derivative do not match, it is an indication of misreporting by at least one of the counterparties. However, many of the counterparties consider that under the current reporting requirements they do not need to take any steps to resolve reconciliation breaks to the extent they believe to have reported correctly.