Case Study: Why CMC Markets selected UnaVista to help them prepare for MiFID II reporting

UnaVista was found to have the required advanced functionalities and “superior technology” to handle their large transaction volumes in comparison to the other vendors considered during the selection process.

Overview

CMC Markets is a leading global provider of online retail trading, offering clients the opportunity to trade the financial markets via contracts for difference (CFDs) and financial spread betting (UK & Ireland only). Established in 1989 and listed on the LSE, CMC Markets launched the world’s first online retail FX trading platform, which was previously only accessible to institutional traders.

CMC Markets and MiFID II transaction reporting

The initial introduction of MiFID for retail derivative firms was aimed at ensuring that end clients understood the risks associated with spread betting and CFDs. MiFID II seeks to further improve that transparency and enhance the conduct of firms providing spread betting and CFD products to retail clients, which includes consumers with varying degrees of sophistication.

CMC Markets reported an average of 66 million transactions annually using UnaVista. With the increase in complexity and scope of MiFID II, CMC Markets required an ARM (Approved Reporting Mechanism) with an experienced team, one that could help them address the nuances associated with the retail derivatives sector, as well as future-proof them for upcoming regulatory obligations.
In 2016, CMC Markets went through a vendor selection process to help fulfil their MiFID II transaction reporting obligations. UnaVista was selected from several vendors as the most capable solution to help the firm achieve full compliance.

Selecting the right vendor

As well as choosing a vendor with the experience to handle the nuances of their industry, CMC had several other criteria to fulfil when choosing the right vendor.

“Superior technology”

UnaVista was found to have the required advanced functionalities and “superior technology” to handle their large transaction volumes in comparison to the other vendors considered during the selection process. The GUI (Graphical User Interface) gave CMC Markets users customisable reporting and charting, while the bespoke nature of the solution allowed for different functions within firms to access the information that is relevant to their job roles and improved their reporting efficiency.

Consultative approach

UnaVista’s consultative approach also contributed to CMC Markets taking the natural transition from MiFID to MiFID II transaction reporting on UnaVista’s solution. CMC Markets had full access to UnaVista’s regulatory compliance experts, who were available to help guide them through the MiFID II transaction reporting landscape, particularly for retail derivative firms. With experience that cuts across several distinct sectors in the financial services industry including NCAs (National Competent Authorities), buy-side firms and sell-side firms, UnaVista’s compliance team provided a 360-view of how retail derivative firms grappled with various aspects of MiFID II transaction reporting. This gave CMC Markets the confidence that they had selected the right vendor that would provide them with more than just a platform, but also guidance and consultation to address the nuances associated with the retail derivative sector.

KPIs statistics pack

In addition to the request for greater transparency by the regulators, CMC Markets added the key performance indicator (KPI) pack as an ancillary and proprietary service from UnaVista. The KPI pack was used to monitor the quality and timeliness of their transaction reports and to identify common issues and fix them at source. CMC was able to gain insight into the total volume of derivative transactions reported per month, percentage of late reports, venues reported to and other valuable statistics beyond the request of ESMA and the regulators.

Quality of product documentation

CMC Markets was pleased with the quality of the user guides produced by UnaVista’s technical writing team. The documentation not only reinforced the level of quality experienced across other functional areas, including sales, regulatory compliance and implementation; it also translated into less reliance on UnaVista’s award-winning customer support team by CMC users of the platform. It meant that CMC users could focus on using the platform with confidence.

Creating an environment for market participants to collaborate

UnaVista regularly creates a community for clients in which they can meet with their peers, discuss the challenges they are facing and offer guidance on how to overcome those challenges to be compliant. For retail derivative firms, a series of events including working groups offered the opportunity for clients to sit around a table with their peers and discuss what actions they were taking to alleviate specific pains associated with MiFID II transaction reporting in their unique sector. UnaVista created a forum with participants from other key market infrastructure, including representatives from ANNA DSB to help resolve some of the more challenging areas, such as OTC ISINs.

Conclusion

UnaVista’s wide-ranging suite of solutions and capabilities ensures that firms like CMC Markets will continue to fulfil their regulatory reporting obligations even when new regulations are introduced, or significant changes are made to existing regulations. UnaVista’s technology, backed by guidance and a wide array of resources, helped make CMC Market’s journey to MiFID II compliance smoother than many in the industry.