MiFID II – Transaction Reporting and Order Book Data

ESMA consulted on transaction reporting (RTS 22) and order book data (RTS 24) as part of the MiFID II review. Some of the consultation proposals are far removed from the Commission’s avowed objectives of simplifying the regulatory framework and making the European economy more competitive.

Several provisions are a matter of concern (AMAFI / 25-06):

• Introducing new identifiers, including the Transaction Identification Code and the Chain Identifier, would add significant operational complexity throughout the reporting chain. Past experience with EMIR’s Unique Transaction Identifier has shown how such identifiers can introduce ambiguities and inconsistencies that exacerbate compliance risks. A cost-benefit analysis is needed.
• The alignment of transaction reporting with the EMIR and SFTR frameworks would duplicate costs for data already covered by these regulations without improving transparency.
• New reporting fields have been proposed with unproven benefits in terms of enhanced supervision, while the shift from XML to the JSON reporting format would add complexity and cost.

Making frequent changes to reporting requirements is extremely costly for market participants and disrupts production and control processes. AMAFI stressed that any proposed modification should be carefully weighed to assess the value that it actually adds. The real priorities should be to eliminate redundancies, buttress supervisory capabilities and simplify procedures to make them more efficient.