12 - reporting of transactions

what transactions are reportable

financial instruments that are traded (or their underlying asset/index is traded)

two types of reporting

trade reporting

transaction (or settlement) reporting

what does trade reporting involve

feedback to marketplace on market depth + liquidity

what does transaction reporting involve

facilitating the settlement

providing info to the regulators

what is UK EMIR

UK European Markets Infrastructure Regulation:

regulation to improve transparency + reduce risk associated with the OTC derivatives market

two requirements under UK EMIR

• obligation to report all OTC derivatives trades —> they must all be registered with a TR

• central counterparty needed for all OTC derivatives trades

what is a TR

trade repository —> organisation that keeps records of financial transactions

what is UK SFTR

UK Securities Finance Transaction Regulation:

regulation to report securities finance transactions and that limits the reuse of collateral

when should order book trades (order driven trading) be reported

automatically and immediately

when should off-order book trades be reported

TRP (trade reporting period) is from 7:15am to 5:15pm

between 7:15 and 8am, when must you trade report

by 8am

between 8am and 5:15pm, when must you trade report

within 3 minutes

after 5:15pm, when must you trade report

by the start of the next TRP (7:15 the next day)

who does the trade report

depends on market seniority

OR

the selling member

what is the order of market seniority

market maker + broker-dealer = market maker reports

two market makers = seller reports

two broker-dealers = seller reports

so market maker is more senior in the market

who is a selling member

the stockbroker or exchange member that handles the sale of the shares

where and when are these trade reports published

daily

on the DOL (Stock Exchange Daily Official List)

what are the deadlines for transaction reporting

domestic transactions: 8pm

international transactions: 9pm

what systems are domestic transactions reported via

CREST

what systems are international transactions reported via

via Omego (DTCC)

who does transaction reports

BOTH parties

who do they report to

UK firm: the FCA

UK branch of EEA firm: FCA and relevant EEA regulator

EEA branch of EEA firm: just their usual regulator (not the EEA ones)

when must you report transactions to clients

T+1 latest

(wording = ‘promptly’)

when must periodic reporting for investment management be done

at least quarterly

when are there exceptions to this

• can be annual if the client gets deal by deal confirmation

• must be monthly if the portfolio is leveraged

how long do firms doing MiFID business need to keep their records for

5 years

(mifid has 5 letters)

how long do firms doing non-MiFID business need to keep their records for

3 years

(non has 3 letters)

how long do client classification records need to be kept

the relevant period (3 or 5 years) AFTER the firm ceases to carry on business with them

how long do client agreements records need to be kept

the relevant period (3 or 5 years) OR the duration of the client relationship

whichever is longer

how long do trade confirmations records need to be kept

the relevant period (3 or 5 years) from the date of DISPATCH