Many financial service companies in EU are on their toes with MiFID II and MiFIR. After being postponed twice from 2015, the moment of truth is now set to 3rd of January 2018 when the new regulation becomes effective. At the time of publishing this article, January 2018 is only 4 months away and will only get closer, so preparations should already be started. One of the most crucial technical developments for the next year consists of the new MiFIR Transaction Reporting.
MiFIR Transaction Reporting (sometimes referred as TRS II) replaces the old transaction reporting (defined in MiFID I) and significantly adds the number of details required of financial instruments and conditions of transactions. The current version consists of 23 data fields, whereas the new one will expand the number of data fields to 65 – keeping only 13 of the basic details untouched.
In addition, the new reporting standard expands the area of required instruments to be reported. Basically, MiFID I requires all publicly traded financial instruments and directly related OTC products to be reported. The new transaction reporting broadens the scope to cover all liquid instruments which underlyings are traded in a public venue, which makes OTC markets also fully covered. This covers also indices or baskets where the underlying meets the criteria.
Needless to say, asset managers must streamline and automate their transaction reporting processes to avoid excessive manual workload with the new transaction reporting.
FA Solutions eases your transaction reporting workload with a seamless add-on process. With our new transaction reporting tool you can collect all the relevant reference data fields needed and consolidate them into the required ISO 20022 XML format. This process can be scheduled and automated to make it an “invisible” background process that you don’t need to worry about. This way we can take steps towards more transparent markets and trading without experiencing it as a burden.
As usually, the financial authorities in Sweden and Finland are one of the early adopters, and therefore all regulated entities are expected to follow the regulation from day one, just as in many other countries as well.
More information about technical details of the reference data can be found from ESMA.