MiFID II – 6 Months On
It has been more than six months since the go-live of MiFID II and for most executing firms it has become part and parcel of their operational workflow. The market data processor (MDP) has reportedly ingested 3.5 billion transaction reports since January averaging half a billion per month in the UK alone! MDP receives data from 23 entities comprising of the seven ARMs (Approved Reporting Mechanisms), ten trading venues and six investment firms which represent approximately 3,150 executing firms. The regulator has noted that there are still a large number of anomalies such as the accuracy of the year of birth – apparently, there are many transaction executing individuals born in the year 1900! Steven Maijoor ESMA Chair, recently told an audience that “…we are still dealing with data quality issues. I therefore urge those of you who have not yet submitted all necessary and correct data, to step up your efforts.“ Both ESMA and the FCA are stating that while transaction reporting is working, there is still a requirement for executing firms to ensure that the data contents of their reported transactions are clean and accurate.
Industry leaders are now calling on the FCA to take a tougher stance and enforce the regulation for non-conforming firms or those in breach. Having invested heavily in implementing the regulation many executives are of the opinion that the initial grace period for firms who adopted a wait-and-see approach should now be forcibly closed. The CEO of the FCA, Andrew Bailey recently launched an investigation into firms flouting the regulations but it is as yet unclear how severe the penalties will be.