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Accurate and Cost-Effective MiFIR Transaction Reporting With Mindtree
The EU has recently assumed a much stronger role in overseeing and controlling securities and derivative transactions to counter an unwanted growth in commodity speculation and “dark markets” in recent years. The EU’s goal is to establish a safer and more transparent financial system by enhancing regulatory requirements, market transparency and investor protection.
The Markets in Financial Instruments Regulation (MiFIR), issued by the EU Commission in 2011, requires financial institutions to migrate from current Markets in Financial Instruments Directive (MiFID) 1 reporting requirements to the stricter, more comprehensive MiFIR rules (also known as MiFID 2) by end of year 2015.
MiFIR’s Far-Reaching Impact on Hundreds of Financial Institutions
MiFIR’s scope extends beyond the European securities markets and investment companies to commodity firms, data providers and third-party country firms.
It also significantly expands both the range of required reporting and the type of data required, for example:
- All derivative trading on regulated markets must be reported, including the previously exempted interest rate, commodity, over the counter (OTC) and foreign exchange (FX) derivatives.
- All instruments traded on Multilateral Trading Facilities (MTFs) and Organized Trading Facilities (OTFs) must be reported, which significantly increases the number of cash instruments involved.
- Any instrument that could have an impact on the value of instruments trading on a trading venue must be reported.
- The reports must include the names of individual traders executing the transaction or the algorithm used, and whether the trader is short selling.
Mindtree can help you with your MiFIR reporting needs
Transaction reporting poses some unique challenges, such as trade data sourcing, data enrichment, report generation and timely regulation submissions. We know that regulatory reporting projects involve frequently changing requirements and very stringent timelines, which if missed, can result in penalties and potential damage to your firm’s reputation.
We have years of experience working with all the major trade reporting regulations, such as MiFID I, Dodd Frank Act, Foreign Account Tax Compliance Act (FACTA), and the European Markets Infrastructure Regulation (EMIR), among many others. We employ proven best practices to optimize operational controls around transaction reporting and help ensure that the reporting process is cost effective as well as timely and accurate.
Our experts have hands-on experience assisting financial institutions to prepare for MiFIR reporting compliance. We know the challenges, risks and practical mitigation approaches and are sensitive to the pressures of tight deadlines and the impact of non-compliance.
Mindtree can assist you across different stages of your MiFIR compliance program with point solutions and end-to-end professional services.
Meeting MiFIR reporting requirements can be a serious challenge.
The journey to becoming MiFIR reporting compliant can be daunting for financial firms for many reasons. Challenges include:
- Determining which IT systems to source transaction data from for each reportable asset class under MiFIR
- Determining which systems to rely on for accurate counterparty and product reference data
- Identifying and filling data and process gaps
- Integrating MiFIR reporting processes into different business units and geographic entities
- Designing a robust control framework around MiFIR reporting for effective change control
Mindtree addresses all these challenges with its MiFIR Solution Framework. The diagram below illustrates our solution’s high-level technical architecture.
Our solution framework can handle all the compliance requirements that MiFIR imposes. It is also flexible and makes it easy to identify business units and geographical regions. Using the reconciliation workflow, the operations team can quickly initiate remedial action to resolve conflicting or incomplete information and obtain the necessary details. Our direct integration framework also makes it easy to integrate the solution with your existing systems. The framework includes:
- Customizable automated batch process for generating MiFIR reports.
- Secure APIs for easy integration with your existing technology landscape
- Custom online HTML / PDF report generation engine
- Secured gateway for XML file delivery
- Reusable components such as field mappings, data models and Quality Assurance (QA) packs that can be quickly adapted to your environment
What makes Mindtree’s MiFIR solution stand out
You need a compliance partner with expertise in designing reporting systems, a solid grounding in business practices and a thorough understanding of the different products in the reportable asset classes. Based on our knowledge of MiFID and MiFIR reporting, experience in implementing similar projects, and proprietary development and testing tools, we can deliver accurate MiFIR transaction reporting solutions and services at a lower cost within regulatory timelines.
For more information on our MiFIR Solution Framework or for assistance in assessing your organization’s MiFIR reporting compliance needs, please email at email@example.com.