OVERVIEW

MIFID II is the Markets in Financial Instruments Directive applicable throughout all of EU, which seeks to reform and regulate the financial markets, in particular investment services, to ensure a higher degree of safeguard for its investors through increased regulations across the trading landscape. The new requirements are aim to have a positive effect on the market by promoting competition, transparency, financial stability while ensuring the orderly functioning of the financial markets.

As part of the MiFIR (which is part of the MiFID II legislation), from the 3rd January 2018, each investment firm became responsible for detailed transactional reporting related to the trading of financial instruments (or all instruments which have underlying financial instruments). The application is for any financial instrument trading within the European Economic Area (EEA) which may be on a regulated market (RM), multi-lateral trading facility (MTF) or organized trading facility (OTF). The data must be gathered and submitted to the regulator “as quickly as possible” and by no later than the close of the following business day.

The entities which fall under this directive and are required to submit transactional reporting are all investment firms, which include investment managers who provide advice or portfolio management on a client-by-client basis (collective portfolio management falls outside the scope)

Post-Trading Reporting Requirements

The transactional reporting, where transaction is defined as the ‘acquisition, disposal or modification’ of a reportable financial instrument includes the following details amongst others:

  • Transmission / Receiving of orders

  • Reportable Instruments

  • Corporate actions and transfers

  • Decision Makers for the investments/execution

  • Identifiers related to individuals and entities involved in the transaction

The BRSANALYTICS MIFID conversion tool provides an easy template for Investment services agents to fill in their transactions, and with the click of a button, convert this information into the XML format required by the local MFSA regulator, allowing agents to focus on the business rather than the technical reporting specifications.

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