MiFIR Transaction Reporting for Asset Managers

Dec 21, 2017

Topics: Compliance | MiFID II |

When the MiFIR transaction reporting regime comes into force on 3 January 2018, any investment firm that does not have a valid Legal Entity Identifier (LEI) may find it tricky to trade.

However, with recent reports indicating about a fifth of investment banks’ clients not having an LEI – the essential tag they will need to continue trading – European Securities and Markets Authority (ESMA) yesterday issued a temporary reprieve to help smooth the LEI implementation.

This granted an interim leeway of six months, during which any investment firm that needs to submit a transaction report can apply for an LEI on behalf of their client.  But the investment firm still needs to store the records and submit the transaction reports, once the LEI has been issued.

The new transaction reporting regime, once established, will be considerably more detailed than now, and will mean that the FCA will soon be armed with a greater volume and granularity of data to detect and investigate suspicious trading activity.

In an age of ever heightened sensitivity to market abuse, firms would be well advised to tighten up their own surveillance and record keeping practices.

Read our latest article to find out:

  • What impact the last minute reprieve from ESMA will have on investment firms;
  • what this increased scrutiny means for firms, and why this increased scrutiny has the potential to fall on all firms, irrespective of whether they have an obligation to transaction report;
  • why MiFIR, transmission arrangements or assisted reporting will require firms to hand over much more information to their executing brokers than they are accustomed to –buy-side firms are not absolved of responsibility; and
  • why transaction reporting across broader number of asset classes may pose new question marks, requiring firms to gain a deeper understanding of market operations and instrument behaviours.

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