How to prepare for the transaction reporting regime under MiFID II

How to prepare for the transaction reporting regime under MiFID II

Rosali Pretorius, partner at Dentons UKMEA LLP, assesses the new European Securities and Markets Authority (ESMA) Guidelines on implementing the transaction reporting, order record keeping and clock synchronisation requirements under MiFID II, highlighting the key issues that businesses and lawyers need to be aware of and how they should prepare themselves for the proposed changes.

Original news

On 10 October 2016, ESMA issued final guidelines (ESMA/2016/1452) on transaction reporting, order record keeping and clock synchronisation under the recast Markets in Financial Instruments Directive 2015/65/EU (MiFID II) and the Markets in Financial Instruments Regulation (EU) 600/2014 (MiFIR). ESMA also published its final report which sets out the feedback ESMA received to its consultation on these topics.

What is the background to these guidelines?

Following the publication by ESMA in September 2015 of regulatory technical standards (RTS) on transaction reporting (RTS 22), order record keeping (RTS 24) and clock synchronisation (RTS 25), and the adoption by the European Commission in June and July 2016 of delegated regulations with respect to those RTS, ESMA has finalised guidelines (ESMA/2016/1452) to ensure the consistent implementation of these new rules. As of the date of publication of this interview, the delegated regulation based on RTS 22 is still under the scrutiny of the European Parliament and Council. The guidelines may therefore require further amendment should there be any objection to that delegated act.

The draft guidelines did much to clarify the requirements and have generally been welcomed by those in the industry, and there are calls for similar guidelines for pre- and post-transparency.

The idea is to help investment firms, trading venues and approved reporting mechanisms (ARMs) and regulators to prepare for compliance ahead of the rules’ application date. Market participants told ESMA in the consultation phase for the RTS that they wanted guidance. In ESMA’s view

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About the author:
Paul Estlin has over 15 years’ experience in the financial services regulatory arena and has worked in private practice, in house and at the regulator- at Addleshaw Goddard, Eversheds, Shoosmiths and Rosenblatt Solicitors, where Paul headed up the firm’s Financial Services Regulatory practice; in legal and compliance roles at Standard Bank and Barclays Wealth; and at the Financial Services Authority and, before that, the Personal Investment Authority.