MiFIR transaction reporting enables NCAs to detect and investigate potential instances of market abuse and monitor the fair and orderly functioning of the markets. There is no real change from the purpose of the existing MiFID I transaction reporting; however, MiFIR was formulated after the MiFID review to better meet the requirements of regulators.
These requirements include more harmonised reporting across EEA. The current process under MIFID I allows some room for interpretation. This can make it difficult for the NCAs to understand reports received from other NCAs and for firms to report to multiple NCAs.
Regulators also need to reflect instruments caught by the Directive on criminal sanctions for market abuse 2014/57/EU (“the Market Abuse Directive”). Under the current MIFID I transaction reporting, firms currently only need to report equity (i.e. stocks) and debt related instruments (i.e. bonds).
Simply put, the regulators need more help to detect market abuse.