The SmartStream Reference Data Utility (RDU) has launched a Systematic Internaliser (SI) Registry to fill an important gap in the MiFID II regulatory framework.
It has launched the registry in collaboration with a group of Approved Publication Arrangements (APAs) including Bloomberg, Deutsche Boerse, NEX Regulatory Reporting, TRADEcho, Tradeweb and Trax.
Having been in operation since the 3rd January 2018, APAs and contributing SIs have been using the SI Registry to help ensure that the correct counterparty reports the trade. The SmartStream RDU has now been selected to operate the SI Registry and is available for all market participants to use.
It aims to help all trading firms to meet their post-trade transparency obligations and allows buy-side firms to identify upfront whether they or their selected brokers will be required to report the trade.
“It’s been very rewarding to see key industry players pulling together in this group very quickly and contributing significant time and effort to resolve gaps in the market infrastructure introduced by MiFID II. We look forward to expanding those that benefit from this Registry and being able to help close other gaps if required,” says David Bullen, Systematic Internaliser Registry Data Group.
The service will enable enables SIs to register the financial instruments for which they are providing SI services in a centralised database through their APA. The Markets in Financial Instruments Directive II (MiFID II) regulatory protocols require that industry participants identify whether trading counterparties are SIs for the financial instrument that they are trading, so that they can determine which counterparty must report the trade.
This is a problem for both buy-side and sell-side participants as no mechanism is defined in the MIFID II framework to collect the necessary data to determine which counterparty should report.
Andrew Munro, global head of fixed income trading at Janus Henderson Investors, said: “This SI Registry is a welcome development and addresses a major functional gap for us in the post MIFID II market infrastructure – SI determination pre-trade. Provided it’s available on fair and reasonable terms it will allow investment managers to confidently, accurately and rapidly identify who is an SI before they trade. Armed with this, and the venue trading option, investment managers should be able to avoid the significant cost of building their own in-house trade reporting capabilities and yet still confidently comply with applicable regulations.”
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