Boat Steps Up MiFID II Preparations
Regulatory approval has been granted by UK’s Financial Conduct Authority (FCA) enabling the trade reporting service TRADEcho to enter the final phases of preparation for MiFID II. The TRADEcho service is provided in partnership between Cinnober’s subsidiary Boat Services Ltd and the London Stock Exchange Group.
The approval to be authorized as an APA (approved publication arrangement) means that TRADEcho can publish post-trade transparency reports on behalf of investment firms to help them meet their reporting obligations under the European Union’s Markets in Financial Directive II (MiFID II), which goes into effect in January of 2018. Today, more than 350 customers in total have committed to use TRADEcho for their MiFID II reporting needs.
“The new regulation will have a major impact on investment firms globally. TRADEcho is well positioned for MiFID II and ready to support the industry,” says Jamie Khurshid, CEO of Boat Services Ltd, the fully owned subsidiary of Cinnober. “We are unique in having over a decade of experience in providing trade reporting services, having reported over half a billion trades with a value in the region of £50 tn and published 18bn quotes. It is clear that the market sees the value in our services and are looking for a provider with experience in regulatory reporting. Our sales efforts and customer dialogues will now be intensified during the second half of 2017.”
Over the past months, several Electronic, Order and Portfolio Management System vendors have formalised partnerships with TRADEcho to automate their MiFID II trade reporting services. Under these partnerships investment firms, with the vendor management systems in place, can use TRADEcho as an APA to report trades and access TRADEcho’s unique Smart Report Router (SRR) to determine trade reporting eligibility.
“These partnerships are of great importance to us and further increase our market coverage,” Khurshid continues. “In total, we now have 26 different vendors connected to TRADEcho, with several more expected by the end of the year. They are serving several hundreds of firms through their offerings, in which we now are included. Exactly how many of these end-customers will have an obligation to report trades under MiFID II remains to be seen, but one thing is certain, the vendors’ integration with TRADEcho will bring new customers and help us support the market further with our market leading reporting services.”
The acquisition and further development of the reporting service Boat has been an important step in leading exchange technology supplier Cinnober’s ambition to broaden the addressable market to include e.g. banks and brokers. Large parts of Cinnober’s development costs for the establishment of the TRADEcho offering have now been incurred. The effects of customer inflow will be evident once the new regulation is introduced.
“Our engagment in Boat and the belonging TRADEcho offering is to be seen as an important investment in the future and we are encouraged by the positive development during recent months,” says Veronica Augustsson, CEO of Cinnober. “Successful new subsidiaries, together with our traditional ongoing business where Brazilian B3 earlier this week released over 6 billion USD in collateral by the introduction of superior clearing and technology for aditional asset classes, will certainly help us build an impressive company group with a broader target group”.
Cinnober has since its inception been focused on exchange and clearing technology, developed for leading exchanges and clearinghouses globally. The company is to broaden its target group by the establishment of subsidiaries with adapted and highly competitive technology offerings. Today three such subsidiaries are established within areas such as trade reporting, client clearing and trade surveillance.
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