On 8 November, UK FCA issued market watch on conduct, trade reporting.
- FCA issued market watch 54 newsletter on market conduct and trade reporting issues.
- Covers LEIs, ESMA instrument reference data, FCA transitional arrangements, trading
venue operator, MiFID II and market data obligations, authorizations and permissions.
Legal Entity Identifier (LEI)
- Firms with transaction reporting obligation must establish an LEI and keep it updated.
- Include investment firms authorized under MiFID, and credit institution under CRD IV.
- Also for operators of a trading venue, or UK branch of a third country investment firm.
- Such firms are also required to include eligible clients’ LEIs in their transaction reports.
- Clients who are legal entities or structure including companies, charities or trust must
obtain LEI code, if they want their executing firm to continue to act from 3 January 2018.
- FCA has produced leaflet which executing firms can use in communication with clients.
ESMA Instrument Reference Data
- ESMA has issued detail of reference data files, together with instructions downloading.
- Identified the financial instruments in scope for MAR, but noted ESMA statement that
it could not take responsibility for information being complete, accurate, or up to date.
FCA Transitional Arrangements
- On 12 January 2018, FCA is decommissioning MiFID I transaction reporting system (ZEN).
- Will use new FCA Market Data Processor (MDP) IT system to meet the new transaction
reporting requirements for MiFIR, which are due to come into effect from 3 January 2018.
- Set out approach to MiFID I transaction reporting obligation after the cut-over to MiFIR.
Trading Venue Operators
- Venue operators should not report the transaction of a UK branch of third country firm.
- As FCA to receive transaction report from these firms as if they were MiFID investment
firms trading venue operators should not report transactions on behalf of such persons.
- Will avoid FCA receiving duplicate report, which gives misleading impression of activity.
Market Data Obligations
- FCA has developed a new Market Data Reporting (MDP) system to enable management
of large changes in volumes, range of market data types, which entities need to submit.
- To meet new market data reporting obligations under MiFID II, MiFIR from 3 January 2018.
- Have now made MDP Industry Test Environment, ITE, available for entities who wish to
demonstrate they conform with technical specification and on-board to the MDP system.
Authorisations, Permissions for MiFID II
- Firms needing new permission who have not submitted an application must take action.
- Can only carry out MiFID II activity for which they have required regulatory permission.
- Firms may need to plan for the required permissions not being in place by 3 January 2018.
- If application already submitted FCA have subsequently informed that it is not complete
must provide the missing information as soon as possible, or cannot assess applications.