MARKET WATCH 70 SUMMARY – 03.10.2022

October 5, 2022

The FCA published MW 70 on the 3rd October 2022.

The Market Watch 70 focuses on MiFIR transaction reporting (RTS 22) and reference data reporting (RTS 23) activities.

Please find below a summary of the key items raised regarding MiFIR transaction reporting (RTS 22).

Arrangements that identify and remediate reporting issues

  • 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
2018 451 383
2019 630 428
2020 677 417
2021 716 385

 

Errors and Omissions Notification

  • 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

Ref Issue Description
1 Natural Personal Identification 1st priority national identifiers must be used wherever available.
2  

Appointed Representatives (ARs)

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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