ESMA guidelines: Big names within the financial sector call for clarity of MiFid II rules

Rick Steves

ESMA has published comments made by financial institutions in regard to its suggested guidelines on transaction reporting, reference data, order record keeping and clock synchronization. The companies, with activities within the sector such as asset management, banking, investment services, regulated markets, exchanges and trading systems, among others, were called to offer their input to improve […]

Call for clarity of MiFid II rules across the industry

ESMA has published comments made by financial institutions in regard to its suggested guidelines on transaction reporting, reference data, order record keeping and clock synchronization. The companies, with activities within the sector such as asset management, banking, investment services, regulated markets, exchanges and trading systems, among others, were called to offer their input to improve the clarity and coverage of MiFiD II rules that should come into force in 2018.

ICE Futures Europe, CME Europe and Deutsche Börse Group, Nasdaq were among the Regulated Markets stating their positions. IG Markets Ltd, State Street and TD Direct Investing (Europe) Limited were the most visible names among Investment Services.

Asset Management had inputs from BlackRock and Amundi, while the Banking activity had notable presence of companies such as UBS Group AG, Societe Generale S.A and Deutsche Bank.

Among Exchanges and Trading Systems, Nasdaq, Euronext, Tradeweb Europe Ltd, Bats Europe and LSE Group plc, captured most attention. Several financial services-related associations and federations contributed to improve the documentation.

BlackRock’s request was towards reporting derivatives trades: “We would appreciate confirmation that for exchange traded derivatives and cleared trades, we do not need to report the trade with the executing broker if it is given up to the clearing member on trade data,” BlackRock stated.

Citadel asked for clarification on how to report cleared OTC derivatives: “The CCP associated with the cleared OTC derivative affects the quoted price of the instrument and therefore should be included in the transaction data reported to regulators and the public”.

Deutsche Bank, troubled since 2015 with high penalties for taking part of the Libor Scandal, requested an exemption to reporting the transfer of non-cash collateral: “Non-cash collateral movements should not result in transaction reports because: collateral exchanges do not constitute a “transaction” as there is no true “acquisition” or “disposal” within the meaning of Articles 2(2) and (3) of RTS 22”.

Although financial institutions have asked for the MiFID directive to be finalized as soon as possible so that they have sufficient time to prepare for the new deadline of January 2018, the European Commission’s call for further review has generated concerns that the new deadline will now not be met.

 

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