ESMA has announced that the requirement for Investment Firms to report transactions only using Legal Entity Identifiers (LEI) will commence on the 3rd July, following a 6 month grace period announced shortly before the start of MiFID II (see here). In effect, this requires all relevant counterparties to have LEIs no matter where they are located. The statement from ESMA can be found here and press release here. In the statement, ESMA talk about the shift by regulators from “monitoring” to “ongoing supervisory actions”.
In the financial sector, the impact of MiFID II is being felt in various ways. This article on The Trade News web site reports that the FCA is beginning a review into the impact of research unbundling, that is the requirement that research is no longer offered as a free part of other services, such as execution services of brokers. This article on the Financial News web site also examines the impact of research unbundling, which seems to have led to a significant decline in revenue for some companies.
The article also looks at the effectiveness of transparency regulations under MiFID II, pointing out that the number of bonds for which transparency data is being published is still low. It also reports that the desired shift away from “dark pools” has not been as effective as hoped. The looming Brexit also has a potential impact on the calculation of liquidity under these rules.
In the meantime, details continue to be updated, with transaction reporting instructions (here), schemas (here) and validations (here) posted recently. We can expect more news over the coming period as the 6 month anniversary approaches.