TRAction’s reporting services include data validation and data enrichment to ensure any errors identified are resolved and the format meets requirements prior to trade repository submission.

We’ve identified the 3 most common errors in the data we receive from our clients:

  1. Missing or wrong identifier of Non-Reporting Counterparty
  2. Wrong notional amount
  3. Duplicate trade ID

1. Missing or wrong identifier of Non-Reporting Counterparty

An LEI or AVOX information is required to be reported for all non-individual accounts, e.g. corporate accounts. Often clients don’t include LEI/AVOX information or provide the wrong LEI information in their data.

What goes wrong?

In the example below there are two position files submitted to TRAction on 28 May and 29 May 2020 in relation to the same order.

For the exact same non-reporting counterparty (ABC Investments Pty Ltd), the LEI number is populated differently. This is clearly incorrect as an entity’s LEI does not change.

Position file 1 – ECP_Positions_20200528_1.csv

Trade Date Trade Party 2 - Counterparty SideLeg 2 - Commodity Underlying DetailsTrade Party 2 - NameTrade Party 2 - ID
2020-05-27T16:58:27ZsellwtiABC Investments Pty Ltd454571A9EA7058FJBE37

Position file 2 –  ECP_Positions_20200529_1.csv

Trade Date Trade Party 2 - Counterparty SideLeg 2 - Commodity Underlyer DetailsTrade Party 2 - NameTrade Party 2 - ID
2020-05-27T16:58:27ZsellwtiABC Investments Pty Ltd454571A9EA7058FJBE38

How is this fixed?

TRAction monitor the AVOX and LEI information submitted and clarify with our clients when any change of information in this field is identified for the same trade so that it can be corrected prior to submission to the trade repository.

2. Wrong notional amount

There are 2 common reasons why the field Notional Amount 1 is reported incorrectly.

What goes wrong?

(a) Wrong price multiplier (contract size)

Different platforms use different contract sizes such as 1, 100 or 10000. When a client uses multiple types of platforms, they can easily be confused about what their contract size is as they move across between platforms. They may therefore provide TRAction with the wrong contract size in all or parts of the files submitted. As a result, the value of the Notional Amount can be incorrectly generated for reporting. ASIC may pick up this issue when the value is above their trigger levels and make further inquiries.

The Notional Amount is calculated as follows:  Volume (Quantity) x Price multiplier (Contract size) x Price

(b) Wrong Volume (Quantity)

Often clients have mistakenly already taken into account the contract size when they provide the volume/quantity. For example:

Correct

Notional AmountVolume (Quantity)Price Multiplier (Contract size)Price
30000.011000030

Wrong

Notional AmountVolume (Quantity)Price Multiplier (Contract size)Price
30,000,000100 (=10000x0.01)1000030

How is this fixed?

This issue is difficult to detect as trades can occur across a wide range of sizes. However, as a result of previous issues with incorrect multipliers, if any notional amount above 100,000,000 is identified during data validation, TRAction will clarify the issue with our client and fix any error.

We also recommend our clients check if we can automatically extract the details from their platform to minimise the errors that occur when using ‘file submission’ method.

3. Duplicate trade ID 

Where a client has multiple servers for a trading platform (e.g. MT4), the same deal number and login ID could potentially be created on each server for separate clients, leading to a duplicate trade ID in transaction reporting.

In the diagram below, Client 1’s deal number 123 and login ID ABC are generated on Server 1 while the same details are generated on Server 2 for Client 2.

What goes wrong?

Where the primary asset class (e.g. a foreign exchange transaction) happens to be the same for two different trades executed by two separate clients (from separate servers) on the same day, one trade will overwrite the other causing a missing trade as the deal number and the login ID are exactly the same.

How is this fixed?

TRAction advise our clients to add server name or number in front of the deal number to avoid this situation happening.

What do you need to do?

In order to minimise the burden on your operations and compliance teams and also reduce time spent on back and forth communication to fix errors in your ASIC OTC derivative trade reporting, it’s important to get the raw data right in the first instance before you submit it to the trade repository or your delegated reporting service provider such as TRAction.

Take the time to review your system settings to ensure the reports are being generated correctly to improve your reporting today.

If you have any questions, please feel free to contact us.

Leo Li

Leo works in our Sydney office. At TRAction, he assists our clients with data extraction and processing. As a all-rounder developer With 11 years’ experience in the IT industry, he primarily focused on web development and data migration. He previously worked as a developer for a European-based software corporation. Leo possesses strong programming skills, excellent SQL development and performance tuning skills.