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What is MiFIR reporting?

On 20th October 2011, the European Commission published two proposals: the revised Markets in Financial Instruments Directive (MiFID II) along with Markets in Financial Investments Regulation (MiFIR). Both the Directive and Regulation aim to establish a safer and more transparent financial system by enhancing regulatory requirements, market transparency and investor protection. The regulation set out to:

  • Strengthen investor protection
  • Reduce the risk of market disorder
  • Reduce systemic risk
  • Increase the efficiency of financial markets

MiFIR sets out a number of reporting requirements in relation to the disclosure of trade data to the public and competent authorities

The new MiFIR reporting requirements will replace the build on the existing MiFID transaction reporting requirements, but will be more difficult in terms of scope and reporting content.

When does MiFIR reporting begin?

The MiFIR reporting obligations are set to go-live on January 2018.

Which firms will be affected?

MiFID II will have an impact on the European securities markets structure and specifically "investment firms". MiFID’s scope is extending under MiFIR to cover more asset classes, so more firms will be caught by the reporting obligations. Additionally, discretionary portfolio managers in the UK who currently rely on the report made by their EEA sell side brokers’ reports may find that they will need to report in their own name to the FCA under MiFIR.

How will the MiFIR reporting affect you?

Key points at a glance

MiFIR will bring a significant expansion in the range of reportable instruments:

    • Financial instruments admitted to trading or traded on a Trading Venue or which a request for trading has been made
      • Trading venue = Regulated Market, MTF or an OTF
      • Clearly adds FX, commodities and interest rate derivatives
    • Financial instruments where the underlying is a financial instrument traded on a trading venue
      • Increases the number of OTC derivatives to be reported and introduces requirement to report certain derivatives traded on third country derivative exchanges
    • Financial instruments where the underlying is an index or a basket composed of instruments traded on a trading venue

MiFIR will also increase the number of fields making up a transaction report to 81. There are likely to be significant new additions including:

    • Trader or Algo identifier to identify the individual trader executing the transaction or the algorithm used.
    • A field to identify when the trader is short selling.

Additionally, the trader and client identification requirements may introduce a number of data protection issues as individuals’ names, addresses and dates of birth may need to be collected, stored and transmitted.

Legal entities will need to be identified with a Legal Entity Identifier (LEI) rather than the existing BIC or FRN

Related regulations

How can UnaVista help you with MiFIR reporting?

UnaVista can assist you with a number of regulations, so that you don’t have to build separate solutions for each problem, future regulations can then be catered for through the platform when required.

Utilise our Transaction Reporting experience

The new MiFIR transaction reporting requirements will be an evolution from the current MiFID reporting obligations. We will continue to offer the highest standards as an Approved Reporting Mechanism to ease clients through the transition. We will build upon the regulated set of fields that we currently use as an ARM to report to all Competent Authorities and offer advice, support and training for our clients.

Avoid duplicate reporting

In order to ease adoption, many of the fields are common to transaction reporting and trade repositories. We envisage that we will be able to operate a single reporting service for both MiFID transaction reporting requirements and the EMIR requirements to report to a trade repository.

Reference data from the source

London Stock Exchange are the UK’s national numbering agency and will be allocating LEIs, meaning firms will have a direct link to the source of the new mandated identifiers.

 

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