Whats the difference between MiFID Trade and Transaction Reporting

Whats the difference between MiFID Trade and Transaction Reporting

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Markets in Financial Instruments Directive (MiFID) became effective in 2007 and is designed to create a more transparent financial system with the aim of improving investor protection. MiFID has two reporting regimes that are often confused, Trade and Transaction Reporting, this article will explain the differences.

MiFID Trade Reporting (near real-time)

These reports are near real-time broadcasts of trade data for price formation and operation of best execution obligations. These are reported via trade reporting venues from where they are disseminated to the market.

LSEG has a Trade Data Monitoring (TDM) service allowing firms, including members and non-members, to report all OTC and systematic trades in the required time frame. Because of our unique position as a Regulated Investment Exchange (RIE), member firms can also report their off book on-exchange business through LSEG using such mechanisms as the Negotiated Trade Waiver. 

MiFID Transaction Reporting (T+1 reporting)

Transaction Reporting, whilst similar in data content has many more fields, but is more relaxed with regards speed of reporting (T+1) and currently greater emphasis is put on inclusion of the client on whose behalf the transaction is taking place. Firms need to report their transactions via an Approved Reporting Mechanism, who provide detailed validation services before ultimately the reports are sent to the regulatory bodies, such as the FCA. Transaction reports are primarily used by regulatory authorities to detect market abuse and the data is not made available to other market participants.

LSEG’s Approved Reporting Mechanism (ARM), UnaVista, is the largest MiFID ARM in Europe helping 1,000 reporting firms and 10,000 of their counterparties report over c2billion transactions annually. Read more about our MiFID service here

How will this change when MiFID II goes live

On January 2018 MiFID will evolve into MiFID II and there are a number of alterations to the rules of reporting. However LSEG will continue to offer a complete service to its clients.

MiFID II Trade Reporting

Trade reporting will require firms to report via Approved Publication Arrangement (APA) for MiFID II. Our TDM service will evolve into a APA service when the application process opens in Q2 2016, allowing firms to continue to report all their OTC, SI and on-exchange off-book business. Read more here

UnaVista customers will be able to benefit from a single UnaVista interface to comply with both the MiFID II transaction reporting and trade reporting (APA) regimes. 

MiFID II/MiFIR Transaction Reporting

MiFID II Transaction Reporting falls under the regulation part of the direct, MiFIR, which means there can be not different interpretations between adopting countries. The ARM regime will remain in place, however there are a number of changes. The number of reportable fields is increasing from 23 to over 60, the number of asset class covered has broadened and the buy-side is no longer exempt. Learn more about these upcoming changes here

UnaVista will continue to operate as an ARM under the MiFIR regime to assist customer with all of their MiFIR transaction reporting requirements.