Tools and technology to meet trade publishing rules
Transparency and the broad challenges
Your trade publishing transparency delivery team has one of the broadest set of challenges to manage, particularly if you’re in the fixed income, commodities and currencies (FICC) space.
New tools and expanded technology
Transparency is one of the key pillars of MiFID II. These obligations, including both new pre-trade and post-trade real-time publication rules, mean the team will need to address a number of distinct but related issues for both the business and technology stakeholders.
You will probably need new tools and expanded technology to stay competitive while complying across the board.
Meeting transparency rules
Post-trade transparency – publishing trades
All investment firms, regardless of whether they qualify as an SI or not, will have an obligation to publish details of the trade in near real time or with a deferral through an APA.
Deferrals mean that, under certain conditions, the publication can be delayed for up to two days or potentially longer if mandated by local regulators.
However the rules are not straight forward. Furthermore, investment firms will need to publish the volumes of transactions undergoing portfolio compression via an APA.
Pre-trade transparency – publishing quotes
Banks who provide liquidity to clients from their own book on a frequent, systematic and substantial basis, are likely qualify as a Systematic Internaliser (SI). This status is calculated on product by product groupings or individual instrument basis
They must register on a quarterly basis with local regulators and provide them with specific reference data.
For the rest of that quarter, SIs will need to publish quotes as executable prices across its clients and to the rest of the market as well. There are waivers and exclusions around the size of the quote that determine whether a quote should be made public. Most of these waivers will be published by ESMA, so your firm will need to integrate this data into your own enterprise platforms.
All investment firms, regardless of whether they qualify as an SI or not, will have an obligation to publish details of trades in near real time, or with a deferral through an APA.
Thomson Reuters will provide a complete set of tools and services, including an approved publication arrangement (APA), to enable firms to comply with pre-trade transparency requirements. The service also provides post-trade publication for all required products, except the cash equity products already covered by MiFID I providers.
The APA will ease the complexities of publication by incorporating deferral rules into the platform to ensure that only the appropriate trades are published and at the appropriate point in time. It will also provide two-way messages to ensure the quality and completeness of the trade submissions.
DataScope Select, the Elektron Real Time data feeds and the Eikon desktop will also provide reference data services which include LIS & SSTI thresholds, liquidity status and any special delay requirements will be added to the instrument records. This is in addition to the equity related information (Average Daily Turnover and Standard Market Size) which is already provided for MiFID I today.
Our APA service will also enable firms to meet their pre-trade publishing obligations through the same platform – thereby delivering efficiency and scale.
We will provide an SI quote publication capability incorporating data validation, monitoring and alerts and significantly, also manage the complexities of applying the waivers mentioned above, simplifying the entire process of pre-trade transparency.
In addition to the APA, we will provide a range of ancillary tools and services including:
- SI Determination analytic tools to measure if a firm qualifies as a Systematic Internaliser
- The required product reference data fields needed to register as a Systematic Internaliser
- For firms wanting to make their own SI calculations or manage waivers, access to transaction counts, volumes, LIS, SSTI thresholds, liquidity status and temporary waiver status on an instrument-by-instrument basis through DataScope Select and the real-time platforms.