MiFID II Spotlights Reporting
Consolidation is likely amongst the reporting platforms which have launched to meet the MiFID II regulations coming into effect at the beginning of next year.
Collin Coleman, chief executive of reporting platform Abide Financial, said a media briefing: “We expect there to be consolidation in the reporting space from the current around 10 providers to two.”
Abide Financial was acquired by Icap in October last year and is now part of Nex Group, a specialist operator of electronic markets and post-trade services, since Icap’s voice broking business was sold to rival Tullett Prebon. NEX has launched a regulatory reporting business powered by Abide. The platform can take data from any source system and enrich and validate the data to ensure it meets regulatory reporting requirement, as well as provide reports of any exceptions.
“Nex Regulatory Reporting brings together a host of post-trade services in a one-stop shop,’ added Coleman, “We can operate as a traditional utility, yet provide value-added services.”
Abide is an Approved Reporting Mechanism under MiFID I, and has applied to be an ARM for MiFID II, as well as an Approved Publication Arrangement (APA) for streaming prices. Abide has filed its application to become a trade repository for derivatives under European Market Infrastructure Regulation, which will be affected by Britain leaving the European Union.
“We are applying to set up a trade repository in the EU 27 so we can continue to offer services across the EU after Brexit,” added Coleman.
Coleman said Abide has more than 120 clients including banks, asset managers, hedge funds, brokers, trading firms and venues and he expects that to double due to MiFID II. The incoming regulations include an increase an increase in the number of fields that have to be reported, as well as including a wider ranged of asset classes, and not just equities as in the original MiFID.
Fixed income is included in MiFID II reporting and MTS, the London Stock Exchange’s electronic bond trading venue, said today it is launching a dedicated web portal and trade reporting service.
Oliver Clark, head of product at MTS, sad in a statement: “We are working to achieve technical compliance well ahead of the introduction of MiFID II in January 2018 as part of the London Stock Exchange Group’s integrated offering covering both on-venue trading and over-the-counter trade and transaction reporting.”
Thomson Reuters also said today it is creating a suite of reporting services to meet MiFID II post-trade transparency requirements.
“In preparation for the new regulations, the company is working closely with over 50 European exchanges and more than 30 additional venues to onboard new MiFID II content to its Elektron Data Platform,” added Thomson Reuters. “It is also providing test data to market participants so that they can prepare their systems for new parameters, such as high-precision time-stamps, in advance of MiFID II deadlines.”
In addition, Thomson Reuters is collaborating with Tradeweb for APA services, which will include data collection, monitoring, validation, exception processing, management information statistics and determination of both standard and enhanced deferred publication arrangements.
Simon Maisey, managing director and global head of business development at Tradeweb, said in a statement: “Thanks to a one-year head start, we are pleased to be able to offer an APA-early facility, enabling our clients to conduct initial testing, with nine leading financial firms already committed.”
Separately, Broadridge Financial Solutions, a technology provider for the financial industry, announced it has acquired Message Automation, which provides post-trade control solutions for derivatives. Message Automation is actively implementing its MiFID II solution with global firms and is already working with Broadridge on addressing self-reporting needs for buyside firms.
Broadridge said this is the third acquisition related to broadening our post-trade and data analytics capabilities following deals in securities financing and collateral management.
NEX says investors have yet to see the real opportunities in transparency and efficiency.
The exchange can provide APA and ARM services.
Incoming regulations will require more data to evidence best execution.
MiFID II requires enhanced visibility over dark and lit liquidity.
The regulator wants to integrate data from multiple repositories and remove duplicates.