ESMA Proposes Changes to MiFIR Transaction and Reference Data Reporting Obligations

The European Securities and Markets Authority (ESMA) yesterday published the Final Report on the review of transaction and reference data reporting obligations under MiFIR.

The comprehensive report, which stretches some 105 pages and follows a September 2020 consultation, contains a series of recommendations and potential legislative amendments to MiFID II/MiFIR, and is aimed at simplifying the current reporting regimes while ensuring the quality of the reported data.

The largest proposed changes were as follows:

• The replacement of the trading on a trading venue (TOTV) concept with the SI approach for OTC derivatives, taking into account the conclusions of ESMA’s September 2020 report on the transparency regime for non-equity instruments and the trading obligation for derivatives;

• The removal of the short sale indicator;

• The alignment with reporting regimes such as MAR, EMIR and the Benchmark Regulation;

• The reliance on international standards, including LEIs, ISINs and CFIs; and

• The inclusion of three additional data elements with a view to harmonise the way they’re reported while avoiding inconsistent and duplicative reporting of the same information at the national level. These are indicators for:

  • Buyback programs;

  • Information on MiFID II client categories; and

  • Transactions pertaining to aggregated orders.

ESMA warned that it’s proposed recommendations are particularly relevant for trading venues, systematic internalisers, investment firms, data reporting service providers and asset managers.

Crucially, too, the European Commission is expected to adopt the legislative proposals and recommendations, while ESMA is ready to provide additional technical advice on those proposals contained in the report. That means that financial participants and asset managers must now look toward implementing the changes.

AQMetrics will take a much deeper dive into the changes in a series of blog posts next week, including key tips for firms to get ready now.