U.K. – FCA Market Watch MiFID/LEI

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.

Hong Kong – SFC Issues Updated FAQs and User Guide

On 8 November, SFC issued updated FAQs and user guide to reflect HKEx’s new website.


On 10 January, HK SFC issued user guide for reporting short positions.

  • Covered updates to user guide on short position reporting, under expanded scope.
  • Included short position reporting process, accessing SPR services, and registration.
  • Included registration acknowledgement, registration activation, completing forms.
  • As well as system breakdown, browser specification, security tips and contact info.


  • On reportable short positions, and those which are required to be notified to SFC.
  • SFC designation of online communication system, publish reported short positions.
  • Daily reporting requirements, reporting notice, specified shares and specified ATS.


  • From 15 March 2017, reporting required for short positions in designated securities.
  • Eligible for short selling specified by Stock Exchange of Hong Kong Limited (SEHK).
  • List of designated securities eligible for short selling is published on SEHK website.
  • From 15March 2017, SFC will cease publishing list of specified shares on its website.