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Mifid, Uncategorized

MiFID II update – LEIs and more

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.

 

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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