Taking control of the transaction report

Transaction reporting - increasing scope

The scope of the transaction report has increased in terms of instruments covered and amount of information in each report. Together with a significant change to exemption rules, this has led many buy-side firms to conclude that they will need to take direct control over transaction reporting, rather than delegate to sell-side counterparties.

Contact us
School of fish
REUTERS/Bazuki Muhammad

Big changes for the buy side

To comply with MiFiD II reporting rules, many buy side firms will need access to extensive reference data on the instruments they trade, both to determine what needs to be reported and to generate the data points.  

Investment firms must report transactions in any MiFID financial instruments to their local regulator or approved reporting mechanism (ARM) no later than the close of the following working day.

Greater scope, greater detail

Transaction reporting will be extended to:

  • Any financial instrument which has traded or has been admitted to trading on a trading venue (and not just regulated markets as previously dictated by MiFID I)
  • Instruments that have had a request for admission to trade on a trading venue or
  • Instruments where there is an underlying instrument or basket/index of instruments traded on a trading venue.

Getting to a definitive list of which instruments are reportable and under precisely what scenarios is crucial; there have already been well publicized fines for under reporting under MiFID I and regulators are also likely to view over-reporting in a similar manner.

Providing in-depth transaction information

Under MiFID II each individual transaction report can contain up to 65 fields, including:

  • New flags detailing particular trade types in certain instruments
  • Specific details of participants, including the Legal Entity Identifier (LEI code) of counterparties, funds and individual accounts
  • And, raising privacy concerns, significant additional personal details (National ID/passport numbers) of the individual persons involved in both the investment and execution decision.

Reference data to meet your new requirements

For many firms, we already provide the backbone for reference data, so accessing and integrating these regulatory data points will be straight-forward and seamless.

For example, we will provide indicators to identify which instruments require transaction reporting. DataScope Select continues to be the primary service for instrument reference and pricing data, much of this information will also be included within the Elektron Real Time data feeds and available on the Eikon desktop as well.

We can also provide a transactional store using Thomson Reuters Velocity, and, from this, stage both the data required for transaction reporting and best execution reporting.