Service fills an important gap in the MiFID II / MiFIR regulatory framework allowing trading counterparties to identify who is responsible for reporting a trade
The SmartStream Reference Data Utility (RDU) in collaboration with a group of Approved Publication Arrangements (APAs), including Bloomberg, Deutsche Boerse, NEX Regulatory Reporting, TRADEcho, Tradeweb and Trax today launch a detailed Systematic Internaliser (SI) Registry. The service enables SIs to register the financial instruments for which they are providing SI services in a centralised database through their APA.
The Markets in Financial Instruments Directive II (MiFID II) regulatory protocols require that industry participants identify whether trading counterparties are SIs for the financial instrument that they are trading, so that they can determine which counterparty must report the trade. The problem is acute for both buy-side and sell-side participants as no mechanism is defined in the MIFID II framework to collect the necessary data to determine which counterparty should report.
The SI Registry has been in operation since the 3rd January 2018 for participating APAs and contributing SIs and offers a comprehensive set of data from more than 50 SIs, with further SIs registering daily. APAs and contributing SIs have been using the SI Registry to help ensure that the correct counterparty reports the trade. The service is open to all APAs and all SIs. ESMA and a number of National Competent Authorities have been made aware of the SI Registry initiative.
The SmartStream RDU has now been selected to operate the SI Registry and from today the data is available for all market participants to use. This helps all trading firms to meet their post-trade transparency obligations and allows buy-side firms to identify upfront whether they or their selected brokers will be required to report the trade.
“This is a great example of how industry collaboration can overcome a gap in the regulatory information register. The APAs are the obvious consolidation point for us to publish the details of the SI services that we offer and we are pleased to be part of this initiative and to see others joining,” says Andrew Bowley, Head of Regulatory Response and Market Structure Strategy, at Nomura.
“This SI Registry is a welcome development and addresses a major functional gap for us in the post MIFID II market infrastructure – SI determination pre-trade. Provided it’s available on fair and reasonable terms it will allow investment managers to confidently, accurately and rapidly identify who is an SI before they trade. Armed with this, and the venue trading option, investment managers should be able to avoid the significant cost of building their own in-house trade reporting capabilities and yet still confidently comply with applicable regulations,” says Andrew Munro, Global Head of Fixed Income Trading at Janus Henderson Investors.
“It’s been very rewarding to see key industry players pulling together in this group very quickly and contributing significant time and effort to resolve gaps in the market infrastructure introduced by MiFID II. We look forward to expanding those that benefit from this Registry and being able to help close other gaps if required,” says David Bullen, Systematic Internaliser Registry Data Group.
Peter Moss, CEO of The SmartStream Reference Data Utility, adds: “We are pleased to be part of this initiative and believe that this is the perfect use case for an industry utility like the SmartStream RDU. It is a natural addition to the broader range of MiFID II reference data services that we already provide to our customers and offers essential transparency for the market to function cost effectively”.
About The SmartStream Reference Data Utility
The SmartStream Reference Data Utility (RDU) is a managed service that delivers complete, accurate and timely reference data for use in critical regulatory reporting, trade processing and risk management operations, dramatically simplifying and reducing unnecessary costs for financial institutions.
The RDU acts as a processing agent for its participants selected data sources; sourcing, validating and cross-referencing data using market best practises so that these processes do not need to be duplicated in every financial institution. An experienced global team, who operate under the compliance frameworks of their customers, deliver data that is fit-for-purpose, consistent and in a format that is specific to the financial institutions’ needs.
Bloomberg, the global business and financial information and news leader, gives influential decision makers a critical edge by connecting them to a dynamic network of information, people and ideas. The company’s strength – delivering data, news and analytics through innovative technology, quickly and accurately – is at the core of the Bloomberg Terminal. Bloomberg’s enterprise solutions build on the company’s core strength: leveraging technology to allow customers to access, integrate, distribute and manage data and information across organizations more efficiently and effectively. For more information, visit Bloomberg.com/company or request a demo.
About Deutsche Börse - Market Data + Services
Deutsche Börse Group has extensive experience in delivering regulatory reporting solutions as well as managing time-critical data dissemination. We offer our comprehensive solutions for regulatory compliance on a single platform – the Regulatory Reporting Hub. Our Hub enables sell-side and buy-side clients, corporates, regulated markets, MTFs and OTFs to meet their current and future regulatory obligations efficiently and reliably. It supports clients in reporting to all relevant national competent authorities (NCAs) across Europe and fulfilling transparency requirements, covering multiple regulations.
About NEX Regulatory Reporting
NEX REGULATORY REPORTING operates within NEX Optimisation, which helps clients simplify complexity and optimise resources. NEX Regulatory Reporting includes Abide Financial and Abide Financial DRSP, an FCA regulated entity. The platform introduces cost efficiencies, mitigates operational risk and provides regulatory reporting effectiveness. Through its multi-regime reporting hub, regulatory obligations are translated into future proof compliant solutions while its specialist advisory teams interpret the impact of evolving markets regulation relating to trade and transaction reporting. In addition to European regulatory environments (EMIR, MiFID/II, SFTR, REMIT), NEX Regulatory Reporting provides specialised reporting services for entities subject to international regulatory regimes such as Dodd-Frank, ASIC (Australia) and MAS (Singapore).
For more information, go to www.nexregulatoryreporting.com
TRADEcho is the suite of MiFID II reporting services hosted and operated by London Stock Exchange Plc (LSE), brought to market in partnership with Simplitium. Formed in direct response to client feedback for compliant, simplified and cost-effective reporting solutions, TRADEcho delivers Trade Reporting (APA), SI Determination and Quoting, Smart Report Router and Assisted Reporting services. For further information, please visit www.tradecho.com
About Tradeweb Markets - Tradeweb APA Service
Tradeweb Markets builds and operates many of the world's most efficient financial marketplaces, providing market participants with greater transparency and efficiency in fixed income, derivatives and ETFs. Focused on applying technology to enhance efficiency throughout the trade lifecycle, Tradeweb pioneered straight-through-processing in fixed income and now supports marketplaces for more than 25 asset classes with electronic execution, processing, post-trade analysis and market data in an integrated workflow. Customers rely on Tradeweb to drive the evolution of fixed income and derivatives through flexible trading architecture and more efficient, transparent markets.
The Tradeweb APA (Approved Publication Arrangement) allows market participants to effectively meet pre- and post-trade transparency requirements across all instruments mandated by the Markets in Financial Instruments Directive II (MiFID II). The service supports 100+ buy- and sell-side firms, including 20 leading banks, with a market share of approximately 70-80% of the non-equity off-venue volume. In addition, the Tradeweb APA provides reporting services to the Tradeweb MTF and OTF, as well as two external execution venues.
For more information, visit www.Tradeweb.com
Trax is a leading provider of capital market data, trade matching and regulatory reporting services to the global securities market. Trax processes on average over 1 billion annual transactions on behalf of its community of over 600 entities including approximately 12 million fixed income transactions. Trax operates an Approved Publication Arrangement (APA) and Approved Reporting Mechanism (ARM) for MiFID II trade and transaction reporting in addition to providing support for other regulatory regimes. Trax estimates that it processes approximately 65% of all fixed income transactions in Europe as part of its post-trade service offering.
Trax is based in London and was originally established in 1985. Acquired by MarketAxess in 2013, Trax is a trading name of Xtrakter Ltd. and is a wholly owned subsidiary of MarketAxess Holdings, Inc. For more information, please visit www.traxmarkets.com