SmartStream have launched a new service fills which an important gap in MiFID II / MiFIR regulatory framework allowing trading counterparties to identify who is responsible for reporting a trade
The SmartStream Reference Data Utility (RDU) in collaboration with a group of Approved Publication Arrangements (APAs), including Bloomberg, Deutsche Boerse, NEX Regulatory Reporting, TRADEcho, Tradeweb and Trax have launched a detailed Systematic Internaliser (SI) Registry. The service enables SIs to register the financial instruments for which they are providing SI services in a centralised database through their APA.
The Markets in Financial Instruments Directive II (MiFID II) regulatory protocols require that industry participants identify whether trading counterparties are SIs for the financial instrument that they are trading, so that they can determine which counterparty must report the trade. The problem is acute for both buy-side and sell-side participants as no mechanism is defined in the MIFID II framework to collect the necessary data to determine which counterparty should report.
In operation since 3 January
The SI Registry has been in operation since the 3rd January 2018 for participating APAs and contributing SIs and offers a comprehensive set of data from more than 50 SIs, with further SIs registering daily. APAs and contributing SIs have been using the SI Registry to help ensure that the correct counterparty reports the trade. The service is open to all APAs and all SIs. ESMA and a number of National Competent Authorities have been made aware of the SI Registry initiative.
The SmartStream RDU has now been selected to operate the SI Registry and from 10 April the data is available for all market participants to use. SmartStream believe this will help all trading firms to meet their post-trade transparency obligations and allow buy-side firms to identify upfront whether they or their selected brokers will be required to report the trade.
- Nomura: “This is a great example of how industry collaboration can overcome a gap in the regulatory information register. The APAs are the obvious consolidation point for us to publish the details of the SI services that we offer and we are pleased to be part of this initiative and to see others joining,” says Andrew Bowley, Head of Regulatory Response and Market Structure Strategy
- Janus Henderson Investors: “This SI Registry is a welcome development and addresses a major functional gap for us in the post MIFID II market infrastructure – SI determination pre-trade. Provided it’s available on fair and reasonable terms it will allow investment managers to confidently, accurately and rapidly identify who is an SI before they trade. Armed with this, and the venue trading option, investment managers should be able to avoid the significant cost of building their own in-house trade reporting capabilities and yet still confidently comply with applicable regulations,” says Andrew Munro, Global Head of Fixed Income Trading.
CTMfile take: Yet another example of how shared third party services can produce major savings and efficiencies. But Andrew Munro’s warning is vital: “Provided it’s available on fair and reasonable terms.”
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