EMIR Refit – Phase 2 Reconciliation

by Rahul Verma, Product Manager, Smartstream

EMIR Reconciliation Phase 2 is bigger. The clock is already ticking.

The question I’m hearing most right now: “Are we ready for Phase 2?” Sometimes it comes from a compliance lead looking for reassurance. Other times it’s an operations director who already suspects the answer. What’s striking is how often, once you get into the detail, the issue isn’t the reporting infrastructure at all – it’s the reference data sitting beneath it.

Most firms handled Phase 1 reasonably well. But Phase 2 changes the equation as the reporting fields are harder, the matching requirements are stricter, and the reference data beneath them is in worse shape than most teams assume. That’s what prompted me to write this.

The stakes are higher than they look. “We’ll manage breaks as they come in.” When I talk to operations leads, that’s often the response. It worked for Phase 1. It won’t work for Phase 2 as the volumes are larger, the fields more complex, and getting it wrong will surface through Trade Repository (TR) notifications to regulators, daily and on the record. Now it’s a bilateral problem. If your counterparty’s reference data is inconsistent with yours, you generate breaks regardless of how well your own reporting is set up.

For firms operating across both jurisdictions, this should not be treated as two separate exercises. The data gaps that emerge in April will not disappear by September. In practice, this is one readiness programme with two milestones.

• EU EMIR REFIT Phase 2: 27 April 2026
• UK EMIR REFIT Phase 2: 28 September 2026

There were 61 reporting fields deferred from EMIR Reconciliation Phase 1 because they’re harder to align across counterparties and they depend on reference data that, in my experience, is far less standardised than firms assume.

39 of those fields require exact match with no tolerance, no rounding grace. If two counterparties apply different FX rates or classify the same energy derivative differently, a break is automatic. The question isn’t whether Phase 2 will create breaks. It’s whether yours will be avoidable – and in my experience, most of them are. But only if you fix the reference data layer first. This is exactly where Smartstream’s Smart Data reference data service is built to help, sourcing and normalising data from 100+ exchange feeds to ESMA standards before the start of each trading day.

Energy commodity attributes are the clearest example. Delivery point or zone, load type, commodity base – these need to come from exchanges, normalised to ESMA standards. When I ask firms where that data actually comes from, the answers vary: internal databases built years ago, third-party feeds nobody has checked recently. When counterparties draw from different sources, a break is almost guaranteed.

When I work with firms that are genuinely prepared, it comes down to the same three things – and all before the first submission cycle, not after.

1. Reference data completeness – Energy commodity delivery attributes and valuation inputs sourced from exchanges, normalised to ESMA standards, refreshed daily. Stale data is the primary cause of reconciliation breaks, and it can’t be fixed post-submission.
2. Proactive break detection – Waiting for TR notifications is not a workable model at scale. You need controls that surface mismatches in your data before submission, while there’s still time to act. Smart Reconciliations exception management controls are designed to identify these breaks pre-submission rather than reactively.
3. Counterparty alignment – For energy derivatives especially, data sourcing conventions need to be aligned bilaterally. It doesn’t happen automatically. The firms managing Phase 2 will have already started these conversations.

The firms that navigate this without incident are the ones that treated EMIR Reconciliation Phase 2 as a reference data project, not only as a reporting system upgrade. If you’re not sure where your data stands, that’s the most useful thing to find out right now.