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MiFID II - Transaction reports

MiFID II / MiFIR has changed the reporting of transactions by investment firms and trading venues considerably. The objective of the new rules for transaction reporting is to obtain better insight into the trading behaviour of market participants and to improve the detection of market abuse.

Obligations for investment firms and trading venues

Investment firms must disclose the details of the transactions that they have executed in financial instruments (and all instruments derived from financial instruments) that are traded or admitted to trading on a trading venue (regulated market, MTF or OTF), regardless of the place of execution. Investment firms can report their own transaction information, but they can also do this via a company that acts as an Approved Regulatory Mechanism (ARM). They can also report via a trading venue of which the systems were used to execute the transaction.

Trading venues are responsible for reporting transactions on their venues for members who are note investment firms. This information must be reported completely and accurately and as quickly as possible to the supervisor (in any case no later than at the end of the following working day).

The above-mentioned obligation for investment firms does not only apply to the execution of orders, but also to accepting and transmitting orders and taking investment decisions. Furthermore, it is required to provide the client's personal details per transaction. For natural persons, the notification must include a national passport number. If the customer does not have a passport, a national identification number must be used, and if the customer does not have this either the final possibility is a so-called CONCAT. A legal entity identifier (LEI) must be used for legal entities. This can lead to a considerable effort on the part of investment firms and trading venues and customers might also be expected to take part in the process.

Legal Entity Identifier (LEI) mandatory with effect from 3 January 2018

Investment firms and operators of trading venues are obliged to state their Legal Entity Identifier (LEI) in transaction reports. The LEI will also be used to identify legal entities in financial transactions. From 3 January 2018, an investment firm shall not execute transactions for a customer that is a legal entity and does not possess an LEI.

The European Securities and Markets Authority (ESMA) has issued a statement on 20 December 2017 to support the smooth implementation of Legal Entity Identifiers (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR).  

Further regulation

The transaction information to be reported and the specific requirements are described in a Commission Delegated Regulation. In addition, ESMA published a consultation document ('Guidelines on transaction reporting, reference data, order record keeping and clock synchronisation') on 25 December 2015 in which examples of different scenarios are provided and how the reporting should take place in this situation. ESMA published the definite guidelines in October 2016 and has issued an update of these guidelines on 8 August 2017. In addition to the guidelines, ESMA published relevant technical reporting instructions and XML diagrams.

Northern TRS

In the collaborative project ‘Northern TRS’ (NTRS), the supervisors of Denmark, Finland, the Netherlands and Sweden develope a new system that meets the requirements of MiFID II to receive the reports and if necessary to send these on to other foreign supervisors.

Request for system test of transaction reporting MiFID II

You must register with the AFM to go through the certification process for your transaction reporting system and thus test your access to the reporting system of the AFM. You can submit an application to register using the English language form via the link alongside.

The Technical guidecontains specifications needed for Submitting Entities to connect and report to the transactions reporting system used by the AFM for the MiFIR transaction reporting.

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