Monday April 3 2017

News Source: Global Exchanges

Focus: Trading Systems and Technology

Type: General




On 3 April, 2017 Bats Europe, a CBOE Holdings, Inc. company and the region’s largest equities exchange operator, announced it has expanded its trade reporting facility, BXTR, to offer a new service that enables buy-side firms to meet their trade reporting obligations under MiFID II. The new service, an assisted reporting model, allows buy-side firms to enable their brokers to submit trade reports on their behalf using the broker’s existing connectivity to Bats Europe.

Under MiFID II, all investment firms are obligated to report their trades when they transact on an OTC (i.e. off venue) basis. The investment firm category can include buy-side firms, who under MiFID II cannot delegate formal regulatory responsibility to their sell-side counterparties, as they can under MiFID I. Therefore, unless a firm is dealing with a Systematic Internaliser, the selling firm is responsible for the report. In practice for the buy-side this is likely to give rise to a trade reporting obligation in the following OTC trading scenarios:

  • When a buy-side firm is trading with a counterparty from outside the EEA;
  • When a buy-side firm is selling to another investment firm that is not a Systematic Internaliser in the instrument in question;

When a buy-side firm is trading between different funds that it manages and cannot take advantage of the exemption available to UCITS or AIF management companies.

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