Meeting all the requisite transaction reporting obligations for MiFID II/ MiFIR can pose a considerable cost to an investment firm. Firstly, determining your reporting obligations requires allocation of internal resources and/or engagement of external consultants to analyse the application of the regulations to your firm. Where you are potentially subject to multiple reporting regimes or operate across jurisdictions, the analysis may become complex. Reporting of trade information itself also comes with costs. While the regulatory burden is not going to disappear, it can be minimised by making sure you choose the most cost-effective and efficient option for you.
The traditional approach: Reporting directly
1. Internal Resources
Meeting the reporting requirements may require re-training existing staff or hiring additional staff. The former can divert human resources from existing projects and the latter adds to employment expenses.
Firms need to spend time and resources to develop ways of generating transaction reports in the correct formats. This in addition to the procurement and storage of all the required data.
3. ARM & Trade Repository Fees
Firms can directly engage with an Approved Reporting Mechanism (“ARM”) or a Trade Repository (“TR”) for MiFIR and EMIR respectively. Charges are generally a fixed monthly or annual account fee plus a per-transaction charge.
The efficient approach: Reporting through a delegated third party
Outsourcing your reporting obligations to a specialised trade reporting provider can result in the following cost savings:
- Free up your internal resources and allow your team to focus on the core offering;
- Reduce the need to obtain and pay for external advice. At TRAction Fintech, we include consulting in our fees so that you can be confident in your reporting obligations without engaging expensive external consultants; and
- Limit the infrastructure expenditure you incur. We have IT specialists who can work with your IT team to adjust your systems to be reporting-ready, again without additional charge.
Best of all, we don’t add these charges to our base reporting offering. Instead, we charge you the same fees (or less) as you would incur if reporting directly to a TR or ARM.