The second Markets in Financial Instruments Directive  (MiFID II) is set to come into effect in January 2018. MiFID II will govern all aspects of the financial markets, including derivatives trading and reporting. Contact us if you would like to discuss your reporting obligations under MiFID II.

Reporting Obligations

Transaction reporting obligations are contained in the MiFIR regulation, which means that there cannot be differing implementation between nations.  The regulations impose reporting obligations in respect of OTC derivative transactions where the underlying instrument is traded on an EEA trading venue.

Which instruments are caught by the new regulations?

MiFID II has expanded the scope of the reporting regime to include:

  • financial instruments admitted to trading or traded on an EEA trading venue or for which a request for admission to trading has been made;
  • financial instruments where the underlying financial instrument is traded on a trading venue; (Guidelines state ‘underlying’ means immediate underlying instrument rather than ‘ultimate’ underlying instrument)
  • financial instruments where the underlying instrument is an index or a basket composed of financial instruments traded on a trading venue.

Which entities need to report?

  • MiFID II extends derivative transaction reporting obligations to:
  • investment managers providing advice and portfolio management to individuals;
  • credit institutions;
  • market operators;
  • all financial counterparties under EMIR;
  • central counterparties and persons with proprietary rights to benchmarks; and
  • third-country firms providing investment services or activities within the EU.

What information needs to be reported?

Currently MiFID transaction reporting only applies to financial instruments admitted for trading on a regulated market (and to OTC derivative contracts linked to those instruments).

Under the new regime, the scope of reporting fields has increased from 23 to 65 and includes:

  • Identification of the relevant parties – the legal entity, natural person or algorithm which submitted the order, made the investment decision or executed the order.
  • Identifying information – a legal entity identifier (LEI) for legal entities and personal identification information for natural persons

Where should reports be made?

Firms can report directly to their National Competent Authority, or indirectly through an Authorised Reporting Mechanism (ARM) or a third-party assisted reporting solution.

If you are undertaking preparations for MiFID II and would like assistance in understanding your reporting obligations and how we can help you simplify your MiFIR reporting, contact us on +20 8050 1317.

UK & Europe Trade Reporting - EMIR

EMIR requires all market participants to report details of all derivative contracts (interest rate swaps, FX, credit, equity and commodity) to Trade Repositories. Read More

Australia Trade Reporting - ASIC

Find out more about the requirements for Australian OTC derivatives reporting under the ASIC regime. Read More

Singapore Trade Reporting - MAS

Find out more about the requirements for Singaporean OTC derivatives reporting under the MAS regime. Read More

Hong Kong Trade Reporting - HKMA

The Hong Kong Monetary Authority (HKMA) requires specified OTC derivative transactions to be reported to HKTR. HKMA reporting obligations in relation to retail OTC Derivatives will come into effect from 1 July 2017. Read More

UK & Europe Trade Reporting - MiFID II

MiFID II extends the derivative transaction reporting obligations of MiFID to a larger group of businesses. Read More