95. For the purpose of defining the party responsible for generating the UTI, ESMA proposed some adaptations to the current waterfall approach in order to align it with the UTI guidance. As a result, the agreement between the parties is no longer a first option but becomes rather a fallback scenario for some specific cases. Also, the cross-jurisdictional transactions are better taken into consideration.

96. ESMA asked market participants whether they would expect difficulties with the proposed changes in the allocation of responsibility for generating the UTI.

97. Majority of respondents supported the proposed waterfall to determine the entity responsible for generating the UTI. However, some associations preferred to maintain the current situation where the agreement between the parties prevail, warning that a change in the current practice would generate confusion.

98. Considering that the UTI generation waterfall is in line with the global UTI guidance and provides clarity in a majority of situations, as well as having in mind the existing data quality issues stemming from disputes between counterparties over the UTIs to be used, ESMA is of the view that it should be applied, limiting to a minimum the cases where the counterparties need to agree. It is hereby clarified that a cleared trade is a trade cleared by a CCP, as defined in Article 2(1) of EMIR. Some respondents considered that a TR should not be an UTI generation entity; ESMA acknowledges that in the EU these cases would be very limited and would materialize only in the presence of an equivalence decision on reporting requirements, but does not want to merely discard this scenario.