Transaction reporting: notification of incidents
AFM places great importance on transparency. That’s why we believe it is important that you (promptly) report any incidents to us that have had an impact on your transaction reports. What does this reporting obligation to AFM mean for you?
What is an incident?
An incident refers to an event as described in Article 15(2) of Delegated Regulation (EU) 2017/590 (RTS 22). The moment you discover the event, it is considered an incident. These events include:
• An event in which there is an error or omission in a transaction report submitted to the AFM;
• An event where there is a failure to submit a transaction report including any failure to resubmit a rejected transaction report for transactions that are reportable;
• An event in which transactions have been reported for which there is no reporting obligation.
When must you report?
According to Article 15, paragraph 2 of RTS 22, an incident must be promptly reported to the AFM. We have decided to implement the reporting obligation as follows, using the process outlined below:
Are you unable to resolve the incident within two working days (T + 3) after the date on which the transaction must be reported (T + 1)? Then you are required to report the incident on T+4 to AFM. By "resolve," we mean: addressing the root cause of the incident and successfully correcting the incorrect or missing transaction.
Exceptions
The process described above does not apply to the following two types of incidents:
- Incidents from the past. Such incidents must be reported to the AFM immediately upon discovery, regardless of whether they can be quickly resolved.
- Specific incidents that we expect you to report immediately. These are incidents that we consider serious and about which we want to be informed, including the cause. Examples include:
- An incident involving a transaction without a validated, issued, and duly renewed LEI (Legal Entity Identifier). This includes, for example, a transaction executed by an investment firm using an invalid LEI (executing entity), or a transaction carried out by an investment firm on behalf of a client without that client’s LEI.
- An incident involving a significant volume of transactions. You are expected to determine what constitutes a significant volume for your institution. We may ask you to provide further justification.
- An incident resulting from external circumstances beyond your control.
What do you need to consider?
Whether an incident must be reported is a decision you must always make yourself. You are also required to determine, based on all available information, whether an incident is relevant enough to report immediately. If you develop a policy on this matter, it must align with the AFM’s policy as outlined on this page.
Important: All incidents that cannot be resolved by T+3 must always be reported to the AFM on T+4.
Are you unsure whether an incident should (immediately) be reported? Then e-mail your case, motivation, and specific questions to mb_trs@afm.nl. For all incidents for which you do not submit an incident form, you are still required to investigate them. It is important that you clearly explain the scope of the issue, conduct a root cause analysis, and specify which control measures and solutions are being implemented. These non-reported incidents must also be carefully documented internally. If the AFM requests it, you must be able to provide an overview of these incidents.
How to report upon discovery and resolution?
Discovering an incident: We expect you to investigate the incident as soon as reasonably possible after becoming aware of it. If, after your own investigation, you determine that it has not affected your transaction reports, you do not need to contact the AFM.
Reporting an incident: Reporting is done only via this incident form. You do not need to wait until your investigation is complete to submit the incident report. Fill out the form as completely as possible and answer the questions as specifically as you can. Email the form to mb_trs@afm.nl. You may include any attachments with the accompanying email. You will receive a confirmation of receipt from us. If necessary, we will contact you.
Informing the AFM: Do you have new information about the incident? Or has it been resolved? Inform the AFM using an updated incident form.
Resolving an incident: The AFM expects you to resolve incidents as soon as reasonably possible. We apply a period of three weeks for implementing a solution after discovering an incident. For submitting a back report, our deadline is three months after discovery of the incident. In some cases, additional time may be required to resolve, correct, and/or resubmit a transaction report. Such requests must be brought to the attention of the AFM as soon as possible, along with an explanation. You can send an email to mb_trs@afm.nl. The AFM will assess this request and respond.