MiFID II Approved Reporting Mechanism REPORT MiFid ii approved reporting mechanism (Arm) report Storm-7 Consulting Storm-7 Consulting Limited 1 TABLE OF CONTENTS 1 MARKETS IN FINANCIAL INSTRUMENTS TRANSACTION REPORTING ................................ 11 1.1 European Union Legislation .................................................................................................. 11 1.2 Report Overview ................................................................................................................... 11 1.3 MiFIR Article 26 Requirements ............................................................................................. 11 1.4 Non-TV FIs Post-Trade Disclosure (EQUITY) ...................................................................... 12 1.5 Non-TV FIs Post-Trade Disclosure (BONDS) ....................................................................... 12 1.6 Commodity Derivatives ......................................................................................................... 12 1.7 Transmission of Orders by Investment Firms ....................................................................... 12 1.8 Legal Entity Identifiers ........................................................................................................... 12 1.9 Transaction Reporting Entities .............................................................................................. 12 1.10 Transaction Reporting by Branches ...................................................................................... 13 1.11 Transaction Reporting Responsibility ................................................................................... 13 1.12 Regulation (EU) No 648/2012 ............................................................................................... 13 1.13 Regulation (EU) No 648/2012 ............................................................................................... 13 1.14 ARM Authorisation ................................................................................................................ 14 1.15 ARM Information Relating to the Organisation ..................................................................... 14 1.16 ARM Information Relating to Corporate Governance ........................................................... 14 1.17 ARM Information on the Members of the Management Body ............................................... 15 1.18 ARM Organisational Requirements: Conflicts of Interest ..................................................... 15 1.19 ARM Organisational Requirements: Outsourcing ................................................................. 16 1.20 ARM Organisational Requirements: Business Continuity and Back-Up Facilities ................ 17 1.21 ARM Organisational Requirements: Testing and Capacity .................................................. 18 1.22 ARM Organisational Requirements: Security ....................................................................... 19 2 ARM OPERATIONAL REQUIREMENTS ..................................................................................... 19 2.1 ARM Connectivity .................................................................................................................. 19 2.2 ARM Organisational Requirements: Management of Incomplete or Potentially Erroneous Information ......................................................................................................................................... 19 2.3 Methods and Arrangements for Reporting Financial Transactions ....................................... 20 2.4 Requirements for the Management Body of a DRSP ........................................................... 21 2.5 Consultation Paper (Guidelines on specific notions under MiFID II related to the management body of market operators and data reporting services providers) ............................... 22 3 FCA'S ARM APPLICATION PROCESS ....................................................................................... 26 4 MiFID II APPROVED REPORTING MECHANISMS ..................................................................... 27 4.1 Overview of Existing MiFID II ARM Offerings ....................................................................... 27 4.2 MiFID II ARMs undergoing testing with the Central Bank of Ireland ..................................... 27 4.3 Benefits of Registering as an ARM ....................................................................................... 27 4.4 Registering as Both an Arm and an APA .............................................................................. 28 4.5 ESMA Register of MiFID Investment Firms .......................................................................... 28 4.6 FCA'S Transaction Reporting Events ................................................................................... 29 4.7 FCA'S Transaction Reporting Forum (December 2016) ....................................................... 29 Storm-7 Consulting Limited 2 4.8 Periodic Changing of Liquidity Categories ............................................................................ 29 4.9 Current FCA Registered ARM Firms .................................................................................... 29 5 MiFID II FIRM ARM STRATEGIC CONSIDERATIONS................................................................ 30 6 EUROCLEAR UK & IRELAND (EUI) ............................................................................................ 31 6.1 The CREST System .............................................................................................................. 31 6.2 CREST Operations ............................................................................................................... 31 6.3 CREST Participants .............................................................................................................. 32 6.4 Settlement ............................................................................................................................. 33 6.5 Settlement Instruction ........................................................................................................... 33 6.6 Real Time Settlement ............................................................................................................ 33 6.7 International Settlement ........................................................................................................ 34 6.8 Reports and Monitoring Settlement ...................................................................................... 34 6.9 Transaction Reporting ........................................................................................................... 34 6.10 Stamp Duty ............................................................................................................................ 34 6.11 Asset Classes........................................................................................................................ 34 6.12 Central Counterparty Services .............................................................................................. 35 6.13 Comprehensive Corporate Actions Processing .................................................................... 35 6.14 Collateral Management ......................................................................................................... 36 6.15 Delivery by Value (DBV) ....................................................................................................... 36 6.16 Paper Interface ...................................................................................................................... 36 6.17 Funds .................................................................................................................................... 36 6.18 Payments .............................................................................................................................. 36 6.19 CREST Features ................................................................................................................... 37 6.20 Firm Membership .................................................................................................................. 37 6.21 End-to-end Funds Processing Solution ................................................................................ 39 6.22 Contact Details ...................................................................................................................... 39 7 XTRAKTER ................................................................................................................................... 41 7.1 MARKET ACCESS ............................................................................................................... 41 7.2 TRAX ..................................................................................................................................... 41 7.2.1 Trax Match .................................................................................................................... 42 7.2.2 Trax Transparency ........................................................................................................ 42 7.2.3 Trax Report ................................................................................................................... 43 7.2.4 Specialities .................................................................................................................... 43 7.2.5 Trax Insight (Trax's ARM) ............................................................................................