Central Bank of Ireland aims to shift bulk of its MiFIR transaction reporting traffic to new machine-to-machine channel

Maria Nikolova

The new machine-to-machine reporting channel for the submission of MiFIR transaction reports is being finalized for launch.

The importance of RegTech in financial services has been underlined in a speech by Colm Kincaid, Director of Securities Markets Supervision at the Central Bank of Ireland.

Mr Kincaid explains that the work in the area of securities and markets supervision involves dealing with heavy quantities of data. These data sets are too large and too frequent to review manually. So, the regulator needs to use technology to facilitate the efficient transmission of data, and to read and understand that data once received. The central bank is continuously looking to ways to improve the effectiveness in doing this, including through its new machine-to-machine reporting channel for the submission of MiFIR transaction reports, which it is finalising for launch.

In the case of machine-to-machine reporting for example, a number of participating firms have engaged with the central bank in the testing of the reporting channel and the regulator has found industry engagement and exchange of feedback to be a very valuable part of the development process.

“When operational, the machine-to-machine channel will facilitate greater automation of reporting, and it is our ambition that the vast majority (possibly as much as 80%) of our MiFIR transaction reporting traffic will migrate to our new machine-to-machine channel”, said Colm Kincaid.

Mr Kincaid explained that technology developments in the securities markets have evolved to such an extent that the central bank is no longer just regulating the conduct of individuals – it is now also regulating the conduct of machines acting across fractions of a second. And this is one of the reasons why technology is vital in helping the central bank perform this supervisory role.

That is why the regulator has included among its strategic initiatives to continue to develop its data analytics capabilities and its technology infrastructure to support the supervisory engagement and inform its judgements and decisions.

Mr Kincaid stressed that, if technology is to play its proper role in innovation, it needs the right ecosystem to support it. Earlier this year, the Central Bank launched its Innovation Hub to provide a specific location to enhance firms’ engagement with the Central Bank on innovation. As indicated in a recent speech by Gerry Cross, Director of Policy and Risk at the Central Bank of Ireland, there has been a steady flow of enquiries from and engagements with a significant number of entities involved with innovation and technology. The regulator has been able to look across its engagements to date and start to identify trends and common issues.

For instance, payments and RegTech businesses account for the largest number of engagements with the Innovation Hub. This is consistent with the Central Bank’s research into the Irish FinTech landscape back in 2017. The Central Bank is also seeing engagement with firms across financial services, including InsurTech firms, funds service providers, and intermediary platforms.

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