We break down the trade-reporting requirements under MiFID II, discussing our 3rd party integrations.
MiFID II legislation, which comes into effect from 03 January 2018, requires any trade which takes place to be reported to an Approved Publication Authority (APA) in near real-time. FlexTrade are integrating with multiple APA’s as part of our compliance solution for MiFID II trade reporting.
“We have fulfilled the RTS 2,13, 21 and 22 requirements relating to trade reporting through our integration with APA’s, using FIX trading community standards including TRAX, LSE TradeEcho and Bloomberg” said Andy Mahoney, Head of Sales at FlexTrade.
Who is impacted?
Reporting is often a sell-side responsibility, however in the case of trade reporting the responsibility may also fall on the buy-side.
“For any instruments where the broker is not executing the order such as internalised, netted or OTC, the trade reporting requirements may be the responsibility of the buy side,” continued Mahoney.
In an OTC trade where the broker is not a systematic internaliser (SI), and the buy side is the seller, then the trade reporting obligation falls upon the buy-side trader.
How we comply
The FlexTRADER EMS integrates with multiple APA’s using the FIX spec and stores the transaction identifier code which indicates that the trade has been reported. Where data is available, ‘first level filtering’ can be performed before the APA which will reduce the number of messages sent as well as information leakage.
Non-MiFID II clients
For non-MiFID II clients executing trades in MiFID II markets, we can pass through the required fields for the broker to execute a trade and transaction reporting on the client’s behalf.
“FlexTrade has multiple legal-entity identifiers and complex structures which are supported for non-MiFID II clients executing trades,” said Mahoney.