Background
MiFIR’s revised text entered force on 28th March 2024, amending Article 26 (transaction reporting data) and book record keeping (Article 25), which is covered in RTS 22 and RTS 24 respectively.
This Consultation Paper (CP) is meant to gather feedback from the industry on revising these two RTS’s.
Questions 1-43 relate to RTS 22, while the remainder relate to RTS 24.
Feedback will be heard until 3rd January, 2025.
Key Proposals to RTS 22
o Consider the alignment of the RCA determination rules to the – equally worded – concept of “most relevant market in terms of liquidity” defined in Article 4(1)(a) of MiFIR and specified in Article 4 of RTS 1 (“MRMTL”);
o Introduce determination rules covering the whole enlarged scope of instruments subject to transaction reporting;
o Address the observed deficiencies in the application of current rules.
o Introduction of “effective date” field to identify the date when the obligation under the transaction in financial instruments becomes effective
o Introduction of “entity subject to the reporting obligation” field to identify the entity subject to the obligation will provide added value in specific instances where the executing and submitting entity differs from the responsible one
o Inclusion of new identifiers and changes to the existing ones, such as the Trading Venue Identification Code (TVTIC), would enable to correctly link the transaction reports along the reporting chain.
o Proposal to use Benchmark Regulation Article 3(1)(3) as reference to define indices and as a way to have a clear perimeter of the term “index”
o Proposal to define the date by which transactions are to be reported and to have this date equal the date of application of revised RTS 22
o Contains a table of a field-by-field assessment comparing transaction data elements with EMIR RTS and SFTR RTS, with proposed changes reported in red font
o Contains a table comparing the rules on determination of the “direction” fields under MiFIR and EMIR for different types of instruments and proposals are in the last column
o Contains a table of an overview of how “price” is reported under MiFIR and EMIR and proposals are in the last column
o Proposal to bring MiFIR definition of “complex trade component ID” to align with EMIR “package ID” field and to introduce an additional field of “package transaction price”
o Proposal to include additional fields for the reporting of DLT identifier under MiFIR Article 26 and two fields to identify the DLT “financial instrument code” and “underlying identification code”, as taken from ESMA’s Report on DLT Pilot Regime
o Proposal to increase the scope of transmission of an order conditions, specifically when an investment firm is trading on own account and sends the order to another investment firm for execution
o Amendment of Article 7 to include specific cases of portfolio and fund managers by aligning the interpretation of the rule to properly identify when a firm is acting as external decision maker of a client or as a buyer/seller in the transaction
o Proposal to add the data element ‘Term of the contract’ to the transaction reports and mandate it irrespective of whether the instrument is reported to FIRDS or not.
o Proposal to add a new field to report the categorisation of the client pursuant to the Article 24 of MiFID
o Proposal to add new field for reporting timestamp for New and Cancellation (field 1 – action type). The new field would provide validity timestamp to know when the new/cancellation report was issued.
o Amendment to the field 35 (Net amount) to reflect that the information is required for all type of instruments and when the information is not available, it can be populated as “Not Applicable”
o Amendment to buyer and seller fields (7 and 16) to specify the identification code when it is not possible to retrieve the LEI or the natural person ID. In such instances the trade is executed in a third country venue or an anonymous order book and it is not cleared by a CCP
o Amendment to accommodate in field 4 (Executing entity identification code) the reporting of cases where the member, participant or user is a natural person
o Amendment to field 47 (Underlying ISIN) to specify clearly that the reporting should be performed at level of each index’s ISIN when the underlying is a basket of indices which constituents are financial instruments traded on a trade venue
o Amendment to field 25 (Transmission order indicator) to take into account to whom the order has been transmitted and clarify the reporting for cases where the seller and buyer are both investment firms and it is impossible to identify the counterparty that has transmitted the order and the one receiving it
o Proposal to retain waiver field (62) and to significantly simplify it to only collect information on the reference price waiver
o Amendment to update the list of flags in field 63 (OTC post-trade indicator)
o Proposal to amend the Annex II by removing references to the UK and updating priority identifiers where needed.
o Removal of short selling indicator
o Amending list of exempted transactions to the effect of disposal of financial instruments in the context of liquidation / bankruptcy / insolvency procedures
o Amending list of exempted transactions to the effect of auctions in emission allowances
o Amending list of exempted transactions to the effect of novation related to clearing arrangements
o Considering gradual transition towards JSON for several reporting regimes currently envisaging XML requirements, and proposal to change the format mandated in RTS 22 Article 1 from XML to JSON
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o Assessment of different alternatives regarding data to be used to perform transparency calculations