way the use their sell-side partners
to report form them. Where many
were able to delegate their reporting obligation under EMIR to
banks and brokers, MIFID II is set
to dramatically disrupt this.
A poll of the audience revealed
63% of delegates expect to combine
in-house technology with solutions
from third-party vendors to meet the
MiFID II reporting requirements.
Per Loven, commercial director
for the London Stock Exchange’s
TRADEcho business, told delegates
that from the regulator’s point of
view, MiFID II will provide cleaner
data.
He added buy-side firms must
find an approved publication
arrangement (APA) providers that
“can do the heavy lifting beforehand, and not just the publishing of
transactions”.
The panel agreed MiFID II will
see a clean-up of post-trade transaction data, which historically has
been very poor according to ESMA.
They urged delegates to consider
the need to demonstrate exactly
what you are doing throughout the
post-trade reporting process. This
means reporting the correct transactions accurately, whether that
be through a third-party vendor or
in-house.
(ESMA) take fiduciary action.
“Under MiFID II the regulator
will want to see the transactions
reported well and of better qual-ity… they will probably take this
as a chance to begin handing out
fines, which is a position ESMA has
taken lately,” she said.
Len Delicaet, commercial manager at TRAX, added this is particularly the case for buy-side firms
who may be hit harder with fines
than sell-side firms.
He explained when asking for
budgets to implement third-party
vendor trade reporting services, it’s
worth noting under MiFID I, fines
were very heavy for reporting failures. It saw around 15 fines worth a
total of approximately £ 50 million.
“The buy-side might feel the
fiduciary risk more acutely than
the sell-side. The sell-side can pay
the fine, brush themselves off and
get back to business as if nothing
happened. Whereas we find with
the buy-side, it can have more of an
impact,” Delicaet said.
On top of this, buy-side firms will
have to fundamentally change the
“As an asset manager you can’t
look across providers and see one
model they all want,” said Matt
Cullimore, sales, OpenGamma.
“This is why it’s never a ‘yes or no’,
you will get different models, and
different pricing models if you give
cash or non-cash. You want to bring
transparency to market but there’s
not the information for that.”
Reporting risk
MiFID II places post-trade reporting under the spotlight. The
incoming regulation represents
a dramatic shift for the buy-side
with their experience with trade
reporting.
Despite confusion among
institutions about when, where
and which transactions to report,
reporting experts agree regulators
may not be so forgiving come 3
January 2018.
Elena Gaetini, European head
of business development and governmental affairs for Reg Tek.Solu-tions, predicted the poor quality of
reporting could see the European
Securities and Market Authority
“As an asset manager you can’t look across
providers and see one model they all want.”
- MATT CULLIMORE, SALES, OPENGAMMA.
