Adding a MiFIR/MiFID II Module to Validate.Trade is one of the next big areas of investment for Report-it.Trade. We have already developed a beta version based on the original ESMA drafts. The recent version of ESMA’s MiFID II / MiFIR Regulatory technical implementing standards– Annex I (RTS) has some notable differences to the previous draft version from a Transaction Reporting perspective and, therefore, from a Data Validation perspective too. I have summarized the points impacting Validate.Trade below.
The unintended consequences of regulation can be clearly seen when it comes to the rules requiring data validation. The way the rules are written, strict validation is mandatory and all invalid data is rejected. Rejecting invalid data sounds like a great rule but if we push this requirement to the upstream trading systems, it can have some undesirable consequences. So what’s so wrong about OTC Derivatives trading systems rejecting invalid data? Shouldn’t the data be entered correctly? The problem is that data is not necessarily bad but is often simply incomplete or unforeseen.
To offer a truly global trade reporting service the Client [a leading TR] chose to offer an FpML interface in addition to CSV and FixML API’s.
Risk Focus attended the premier Derivatives Regulatory Reporting conference of 2014 in London from June 17-18. The conference covered many significant challenges posed by financial institutions related to derivatives trade reporting in compliance with Dodd-Frank, EMIR and other jurisdictions.
The Role of Swap Execution Facilities (SEFs) in Derivatives Trade Execution, Clearing and Reporting: Part 4
Reporting workflows for cleared swap trades are significantly more complex than uncleared trades. The major addition is the role of the Derivatives Clearing Organization (DCO) which takes on and bears counterparty risk during the life of the swap trade.
The Role of Swap Execution Facilities (SEFs) in Derivatives Trade Execution, Clearing and Reporting: Part 3
Uncleared swaps executed on a Swap Execution Facility must be reported by both the SEF and the Reporting Counterparty (RCP).
The Role of Swap Execution Facilities (SEFs) in Derivatives Trade Execution, Clearing and Reporting: Part 2
Under the CFTC’s SEF Rule, Swap Execution Facilities have the responsibility to report real time data and creation data of all swaps executed on their platform to a Swap Data Repository (SDR).
The Role of Swap Execution Facilities (SEFs) in Derivatives Trade Execution, Clearing and Reporting: Part 1
Swap Execution Facilities came into existence as a result of the Dodd-Frank Act. A key goal of the Dodd-Frank Act is to bring greater transparency to the OTC swap market through derivatives trade execution and derivatives reporting.
The Dodd-Frank Act combined with a raft of CFTC rules have created a complex derivatives trade reporting ecosystem in the United States as shown below in this infographic.
The European Markets Infrastructure Regulations (EMIR) derivatives trade reporting rules went into effect on February 12, 2014. Derivatives trading entities incorporated in the EU and their overseas branches are required to report the details of their derivatives transactions to an authorized Trade Repository (TR).