EU proposals to make the swaps market more transparent risk adding cost and liability to the property industry, the British Property Federation has claimed.
The idea behind the European Markets and Infrastructure Regulation proposals were welcomed by the BPF, but it felt property companies were at risk from trade accuracy reporting proposals.
Chief executive Melanie Leech said: “While we would not dispute the importance of trade reporting for financial firms, this element of EMIR has created a disproportionate operational and legal burden on many real estate businesses, who use derivatives for sound risk- management purposes. It would be a shame to see the commission pass up this opportunity to make life easier for many businesses at little risk to the financial system.”
The BPF has suggested instead a move towards “single-sided reporting”, in which the reporter is also responsible for accuracy in all cases.
Alternative suggestions are exemptions for non-financial counterparties such as propcos unless they trade more than a fixed amount of derivatives.
Another is to make the information held in trades freely available so property companies can check their data at no extra cost.
