384. High data quality under EMIR is closely linked with reconciled data. Status “reconciled” is understood as the lack of difference between the values reported for each field by the two counterparties in their respective submissions to the TRs thus allowing the authorities to understand the economic terms of the derivative.

385. Based on the experience with EMIR, ESMA understands that certain fields, such as the free text ones could not be subject to reconciliation. [to be excluded if no free text fields]

386. Additionally, ESMA also considers that certain data fields might not be fully matched and proposes that some degree of tolerance should be applied. While determining the actual rules on this aspect, ESMA proposes to take into account the potential trade-offs (i) between quality of data and degrees of tolerance and (ii) between the degrees of tolerance and the completion of the reconciliation process. There are different levels of tolerance applied in the industry and across systems. In order to harmonise EMIR and SFTR reporting regimes, ESMA specifies the fields where tolerance can be applied and the level of tolerance:

a. Timestamp fields, such as execution timestamp where a difference of 1 hour between the times reported by the derivative's counterparties would be tolerated.

b. Numerical value fields where there might be different sources of information, such as valuation, when reported by the two counterparties, where a 5-basis point from the midpoint would be tolerated.

c. Percentage values, where matching up to the third digit after the decimal would be tolerated.