EUROPEAN UNION: Northern European countries launch new system to implement MiFID II/MiFIR

Wednesday July 20 2016

To meet the requirements of the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR), the competent authorities in Denmark, Finland, the Netherlands, Norway and Sweden, have decided to jointly develop a new system to address the new obligations. This cooperation is called Northern TRS (NTRS) and the development of the system is done together with an external supplier.

When MiFID II/MiFIR comes into force each investment firm will be responsible for reporting the details of their transactions executed in financial instruments (and all instruments derived thereof) which are traded, authorised or permitted to be traded on a trading platform (regulated market, MTF or OTF) regardless of the place of execution. This information should as soon as possible, and at the latest by the end of the next working day, be fully and accurately be reported to the relevant supervisor.

The contents of the transaction data and the specific requirements are described in the “technical standards” (RTS221) established by ESMA. Furthermore, ESMA published in December 2015 a consultation document “Guidelines on transaction reporting, reference data, order recordkeeping and clock synchronisation” in which examples are included which describe how to report different scenarios. Investment firms may report transaction data themselves, by using a company acting as an Approved Reporting Mechanism (“ARM”) or by using a trading platform whose systems were used in order to carry out the transaction.

The Northern TRS project started in 2015 and has now reached the development phase. According to the project plan the system will be ready for production on 3rd January 2018 and testing with submitting entities is planned to start in mid-2017.

The project has strong dependencies to ESMA and its MiFID II/MiFIR implementation program called ESMA Delegated Projects. Due to technical implementing challenges related to essential data infrastructures faced by ESMA and national competent authorities the transposition and application date for MiFID II/MiFIR has been postponed by one year from 3rd January 2017 to 3rd January 2018. The deadline for the member states to transpose the new directive into national legislation is set for 3rd July 2017.

Further information about the project’s time plan and related technical specifications will be provided on a continuous basis jointly by the signed competent authorities.

Click on the above link for further information.