7.1.1 Introduction

552. The correct preparation of the Trade State Report (TSR) by TRs is essential to ensure the achievement of one of the main objectives of EMIR - the monitoring of systemic risks to financial stability.

553. TRs should include the most up-to-date information relating to outstanding derivatives in the TSR in order to allow the authorities to have a direct and immediate access to the most granular information on existing risk exposures between counterparties. TRs should also allow each individual counterparty to have a clear understanding of its own exposures vis-à-vis each market participant with which it has an open derivative.

554. The requirements for TRs to produce TSR are included in Article 2 and 5 of the RTS on data access and Article 4 of the RTS on data quality.

555. In sections 0 and 4.6.2, ESMA provides clarifications on the allowable sequences of action types and on the allowable combinations between action types and event types. Furthermore, in section 4.9 ESMA includes guidance with regards to the timeliness of reporting of the conclusion, modification and termination of a derivative.