Q2 2020 REVIEW

June 8, 2020

Murray Abel (MD)

Welcome to the 3rd edition of our quarterly newsletter.

I have to admit, when we first agreed to a quarterly schedule, I wasn’t quite sure if there would be enough news for a business focused exclusively on regulatory reporting accuracy and completeness. How wrong I was.

This quarter CME has dropped a bombshell on the market that they will be closing all regulatory reporting operations in November 2020 – something which will force many 100’s if not 1000’s of Investment Firms to look for a new supplier in under 6 months. 6 MONTHS!

Having been involved in over 75 MiFIR and EMIR implementations over the past decade, I really cannot understand how this can be a sensible timescale for the regulators to have agreed to…

The issue is – the accuracy and completeness of reporting remain the sole responsibility of the executing entity/reporting firm (see quotes below). Given that the CME will be shutting the door and throwing away the key after their clients have ported, we urge reporting firms to take the necessary actions to ensure they can meet their legal requirements (and soon).

“Investment firms shall have arrangements in place to ensure that their transaction reports are complete and accurate.”

(Article 15, RTS 22)

Additionally, when choosing a new provider for reporting, it is definitely a good idea to focus on owning and understanding your data processing logic. With ARMs and TRs charging as per record fee, remediation costs can add up quickly if this isn’t managed.

“Counterparties that are required to report the details of derivative contracts shall ensure that such details are reported correctly”

(Article 9 (1e), EMIR REFIT)

Our transition services can help you achieve full control on your reporting, and avoid the 45% and 80% error rate the average MiFIR and EMIR reports are currently showing in our TR Accuracy tool.

In other news, the FCA has reiterated the importance of transaction reporting in their latest Market Watch – the 3rd time in a year.

Meanwhile, Control Now continues to grow from strength to strength, and we welcome Mareen Rauf into the team to manage the expansion of our TR Accuracy tool into SFTR, and more clients are trusting our services. Q3 2020 is shaping up nicely and we are preparing for significant but controlled growth.

Looking ahead, we have committed at a management level to expanding our TR Accuracy tool into ASIC and Canada jurisdictions (as well as SFTR). We will provide further details on timescales in our next update.

We hope you find these updates useful. If you have any suggestions on how they could be improved, or other initiatives you would like top see us work on, please let us know.