206. Article 4 of the draft ITS on reporting provides that the counterparty side to the derivative contract shall be determined at the time of the conclusion of the derivative on the basis of the type of contract concluded.

207. Based on the above, counterparties should determine the counterparty side at the time of the conclusion of the derivative and report either Buyer/Seller in field Direction or Payer/Receiver in field Direction of Leg 1 and Direction of Leg 2 depending on the type of contract concluded, as provided in the table below.

208. Counterparties, once determined the counterparty side, should report the fields related to Direction, Direction of Leg 1 and Direction of Leg 2 with the opposite values. It is expected that the counterparty which reports Payer as Direction of Leg 1 should report Receiver as Direction of Leg 2 and vice versa.

209. This means that in case where the two counterparties concluded a contract which requires the population of the field Direction, if the counterparty 1 reports Buyer as Direction, the other counterparty to the contract should report Seller and vice versa.