MARKET WATCH 70 SUMMARY – 03.10.2022
October 5, 2022
The FCA published MW 70 on the 3rd October 2022.
Please find below a summary of the key items raised regarding MiFIR transaction reporting (RTS 22).
- FCA encouraged by the progress made with RTS 22 data quality.
- FCA provided table with number of firms requesting transaction reporting data extract and submitting breach notifications.
- Firms not making regular extract requests are reminded this is a requirement under Article 15(3) of RTS 22.
- FCA suggests many firms are not conducting sufficient checks on their data.
|Year||Firms making data extract request||Firms submitting breach notifications|
- FCA states some firms include unhelpful information on breach notifications e.g., limited details and references to proprietary reporting systems.
- The FCA expects notifications to be comprehensive, including adequate background to facilitate a full review of the incident.
- The FCA states best practices include the provision of examples to show how a field was misreported, and how this will be corrected going forward.
Common Transaction Reporting Errors
|1||Natural Personal Identification||1st priority national identifiers must be used wherever available.|
|When a transaction is executed by an Appointed Representatives (AR), the principal firm should be identified in the executing entity field. The AR should not be identified.|
|3||UK Branch Execution Definitions||Definition of execution not limited to geographic location of trader.
Execution is defined in Article 3 of RTS 22, but also consider :
1. Branch that received the order
2. Branch that oversaw the investment and execution decision makers
3. Branch with venue membership
|4||Misusing ‘INTC’ reporting convention||Examples include :
· Reporting an order from one client executed in multiple fills.
· Using ‘INTC’ to signal an internal trading account.
· Failing to report both the market side and the client side of a transaction.
|5||Trading venues||FCA stated that Trading Venues are responsible for the quality of the transaction reports they submit. Trading venues should have robust processes to submit complete and accurate transaction reports.|
|6||Reporting market identifier code ‘MIC’||Some firms report a MIC when they transmit an order to an executing broker. XOFF expected (See 5.4.2 of guidelines).|
|7||Instrument Full Name for OTC||The instrument full name reported should contain a clear description of the financial instrument traded (e.g., Vodafone CFD).|
Full scope of Article : Market Watch 70 (fca.org.uk)
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