ESMA issues updates on MiFID II and MiFIR data reporting, commodity derivatives and market structure topics
Yesterday, the 10th of July 2016, ESMA updated their Q&As on MiFIR data reporting, MiFID II and MiFIR commodity derivatives and MiFID II and MiFIR market structure topics.
When TRADEcho’s regulatory team review regulatory updates they look for anything that would directly or indirectly affect TRADEcho or their clients with regards to market transparency, or any points that have the potential to have a major impact on firms in their compliance with MiFID II.
You can read the updates here:
This Q&A update answers some queries and clarifies how certain data fields are populated in specific circumstances. For example, what happens in the the Total Nominal Issued Amount field when the buyer and seller in a transaction are the same. It also confirms that actionable indications of interest must be recorded for data retention purposes.
This Q&A update mainly covers position reporting so there is little relevance to transparency. However, for position reporting it clarifies that firms need to report only on EEOTC positions as venues will report their on venue positions. It also clarifies that any reporting obligations for an Investment Firm that cannot be fulfilled because of non-EU data protection rules will put that Investment Firm in breach.
This Q&A covers a multitude of market structure topics but specifically answers the following question:
Should a system providing quote streaming and order execution services to multiple SIs be authorised as a multilateral system?
It states that some prospective APAs propose setting up arrangements which, on top of their APA services, provide a suite of quote streaming and order execution services to SIs and their clients. Clients cannot interact with more than one SI via a single message but can send multiple messages to multiple SIs participating in the service provided. If a system allows multiple SIs to send quotes to multiple clients and allows clients to request execution against multiple SIs, then this meets the interaction test foreseen for a multilateral system even if there is no aggregation across individual SI quote streams Accordingly, a system that provides quote streaming and order execution services for multiple SIs should be considered a multilateral system and would be required to seek authorisation as a regulated market, MTF or OTF.