Is Your MiFID II Transaction Reporting at Risk?

The Importance of Accuracy in MiFID II Transaction Reporting

A key part of the MiFID II control framework is reconciliation. For firms that have not invested in using an Approved Reporting Mechanism (ARM) or have not invested in reconciliation work, a large number of errors may have built up over time.

Article 15(2) of the Commission Delegated Regulation (EU) 2017/590 of 28 July 2016 states that where the trading venue or investment firm becomes aware of any error or omission within a transaction report submitted to a competent authority, including any failure to resubmit a rejected transaction report for transactions that are reportable, or of the reporting of a transaction for which there is no obligation to report, it shall promptly notify the relevant competent authority of this fact. Many firms not using a quality-assured Approved Reporting Mechanism have failed to do this.

Challenges in MiFID II Transactions Back Reporting:

If the volume of MiFID II reporting errors builds up over time, there will be a need for wide-scale back reporting. Key challenges faced in MiFID II back reporting include: 

• Re-reporting large volumes of historical transactions that were previously incorrectly reported 
• Errors in transactions existing as far back as five years ago
• Trading platforms data extraction issues impacting MiFIDII transaction report data quality
• Multiple errors in a single transaction
• Under and over-reporting
• Incorrect reference data such as LEIs
• Back reporting not coupled with remediation

How to Ensure Accurate MiFID II Transaction Reporting:

Before starting to use an ARM or switching ARMs many firms need to first find an effective solution for the MiFID II back reporting problem. This is where AQMetrics can help. We believe the AQMetrics back reporting platform is a bridge for our newest customers as they move to our award-winning ARM while back reporting through AQMetrics in parallel.

With AQMetrics, you benefit from:

• As a regulated ARM, the AQMetrics team have deep MiFID II domain experience
• This embedded knowledge is used to automate the analysis and categorisation of client errors 
• Our off-the-shelf back reporting process is used for generic errors  
• Our subject matter experts then automate client-specific errors
• Back reports are then submitted via AQMetrics ARM to the relevant competent authority, ensuring compliance and accuracy in your transaction reporting process.