In our previous blog post, we discussed the Markets in Financial Instruments Regulation (MiFIR) and the transaction reporting requirements it imposes on financial firms. In this post, we will take a closer look at the specific details of these reporting requirements.
Transaction Reporting Obligations
Under MiFIR, financial firms must report the details of their transactions in in-scope financial instruments to regulators on a daily basis. These reports must include the following information:
The date and time of the transaction
The financial instrument(s) involved in the transaction, including their identification codes
The buy or sell indicator
The quantity and price of the financial instrument(s) involved
The currency in which the transaction was conducted
The identification codes of the firms involved in the transaction
The venue(s) where the transaction was executed
The capacity in which the firm was acting (i.e. whether it was acting as a principal or agent)
Firms must submit their transaction reports to regulators as soon as possible after the transaction has been executed, but no later than the close of the following working day. If the transaction is executed outside of normal business hours, the report must be submitted by the close of the next working day.
If a transaction is cancelled or amended after it has been reported, the firm must submit a correction report to the regulator as soon as possible.
Exemptions and Thresholds
MiFIR includes certain exemptions and thresholds for transaction reporting. For example, transactions that are executed outside of a regulated market or multilateral trading facility and have a value of less than €50,000 are exempt from reporting.
In addition, firms that are deemed to be small and medium-sized enterprises (SMEs) are subject to reduced reporting obligations. SMEs are defined as firms that have an average annual turnover of less than €40 million over the past three years and employ fewer than 250 people.
Penalties for Non-Compliance
Financial firms that fail to comply with MiFIR transaction reporting requirements may be subject to fines and other penalties. In some cases, these penalties can be significant, and can have a negative impact on a firm's reputation and ability to do business.
How Can Surety Help?
Given the complexity of MiFIR transaction reporting requirements, it is essential for financial firms to have robust compliance procedures in place. Surety can help firms to simplify the process of regulatory compliance by providing a centralized platform for managing their controls and evidence.
Our platform enables firms to align their controls to the regulations that apply to them, and to easily evidence their compliance to regulators. This gives firms the evidence and insights they need to successfully implement regulatory change projects or assess their impacts or exposures from new/changing regulation.