MiFID II / MiFIR Reporting

Reporting Obligation Overview

MiFID II & MiFIR Reporting within the EEX Compliance Services Framework

Financial Instruments Directive (MiFID II) and the accompanying Markets in Financial Instruments Regulation (MiFIR) regulate the provision of investment services in a wide range of financial instruments on regulated trading venues as well as in over the counter (OTC) trading.

The MiFID II / MiFIR functionality is aligned with the EEX’s Groups other regulatory reporting services for REMIT and EMIR using the same infrastructure, member access mechanisms as well as a common source of exchange, clearing and configuration data to best serve your needs

All exchanges of EEX Group are covered (CEGH, EEX and PXE).

MiFID II/ MiFIR entered into force on 3 January 2018. These two reporting obligations have changed the European Securities Market by strengthening the stability and integrity of the financial market.

Position Reporting

Overview

• As part of MiFID II, there is an obligation for EEX to submit a daily/weekly position report to the relevant National Competent Authorities (NCAs), e.g. BaFin (Article 58, paragraph 1).
  EEX leverages ECC position data to generate a draft report with all the information available for each exchange member (NCM) daily
• Exchange members are required to support the position reporting of the trading venues (Article 58, paragraph 3) and can do so using the regulatory reporting solution of EEX Group.
  • Members can access and amend the draft reports provided by the regulatory reporting service of EEX Group.
  • Members only need to contribute additional information not available to the exchange (for non-investment firms this will include the hedge/spec flag).
  • Investment firms have the obligation to submit own position reports to NCAs
  • In case the member does not provide any amended information within the defined timeframe, EEX Group will submit the generated draft MiFID II position report assuming that it is complete.
  • Split-up of positions on client level can be created based on the draft reports generated by EEX.
  • Reporting of off-exchange positions is supported (for derivatives listed at EEX).

Standard Workflow

• Reports are automatically generated based on ECC position data, member static data and default values provided by the member.

• EEX provides draft reports for amendment or replacement by the member on SFTP.
• Members can optionally amend report data.
• Reports are automatically submitted to the National Competent Authority (NCA) using the MVP Portal of BaFin.

Static Data

Members are required to provide additional member-related static data (one-off task) according to the definition in ESMA’s  ITS4 (see attachment):

• Member LEI/National ID
• Member Status (IF/None-IF)
• Email
• Ultimate Parent LEI/National ID
• Ultimate Parent Email
• Parent of Collective Investment Scheme Status
• Risk-reducing default
• EEX will provide the instrument static data needed for the report creation

Draft Reports

EEX will prepare a full position report in the ITS4 format:

• Using the extended FCA schema provided by FIA
• Based on ECC position data with all information available to the exchange
  • For the hedge vs. speculative default, members can provide a global default value

The draft report will always be based on the assumption that the relevant Non-Clearing Member (NCM) is the end-client in accordance with the regulation.

Member Access to Draft Reports and Report Submission

• Members can download the draft reports prepared by EEX from FTP server, make amendments and upload new versions. (Report uploads must use the full ITS4 format and include all records.)
• Each member will receive an individual password as well as a username to access the server
• The timeline for modifications is 10:00 – 14:00 CET).
• EEX will submit the reports directly to the National Competent Authorities (NCAs)

Schema

The Financial Conduct Authority of Great Britain (FCA) is the only National Competent Authority (NCA) with a published ITS4 adaptation (xml schema and reporting guideline):

Other NCAs have not yet published technical interface specifications or a schema file.

EEX suggests the usage of the FCA schema to our relevant NCAs, and therefore bases its planning activity on this structure.

FIA and EFET have jointly published a Position Reporting Schema based on multiple workshops with industry partners to cover the member to exchange position reporting. (This is based on the FCA’s position reporting schema used for the exchange to NCA communication.):

• Full consistency for all attributes included in the FCA schema
• Additional (optional) attributes added where required by trading venues or firms for internal processes

EEX will use the “Extended FCA” schema for data exchange with the members and assumes that the original FCA schema can be used for data exchange with all relevant NCAs.

Transaction Reporting

Overview

As part of MiFIR, there is an obligation for EEX Group exchanges to submit a daily transaction report for non-investment firms and third-country firms to the relevant National Competent Authorities (NCAs), e.g. BaFin (§ 26.5, RTS 22).

EEX Group will leverage ECC‘s position transaction data as well as order data from the trading system (T7) and combine this information with instrument reference data and configuration data provided by the members to create a draft MiFIR transaction report.

Applicable exchange members are required to support the transaction reporting of the trading venues and can do so using the regulatory reporting solution of EEX Group.

Members can access and amend the draft reports provided by the regulatory reporting service of EEX Group

Applicable members only need to contribute additional information not available to the exchange (In the case of exchange trades executed on the continuous market, this is usually the hedge/spec flag which can be entered at order level, but can also be amended on T+1 up to an early afternoon deadline)

Investment firms have the obligation to create MiFIR transaction reports. For investment firms EEX Group will be able to offer the same draft report creation service as stated above. None-the-less it is assumed that an investment firm might have more complex amendment requirements and in addition to the draft reports, further measures have to be implemented.

Standard Workflow

• Reports are automatically generated based on ECC position transaction data, member static data and default values provided by the member
• EEX provides draft reports for amendment or replacement by the member on SFTP
• Members can optionally amend report data
• Reports are submitted automatically to the National Competent Authority (NCA) in time to meet reporting deadlines

Static Data

Members are required to provide additional member-related static data (one-off task):

• Member LEI/National ID
• Member Status (IF/None-IF)
• Risk-reducing default
• Usually only for investment firms: Short-code translation details – Deutsche Börse AG based infrastructure defined in the context of exchange trading on T7 trading system and RTS 24 (order audit trail) related data provision requirements, see documentation and link section for more details.
• EEX will provide the instrument static data needed for the report creation

Draft Reports

• EEX will prepare a full transaction report draft each morning  based on ECC position transaction data as well as T7 order data
• If members do not use the hedge / speculative related flag at order entry level, EEX Group will use the hedge speculative default, members can opt for all speculative or all hedge.

Member Access to Draft Reports and Report Submission

• Members can download the draft reports prepared by EEX, make amendments and upload new versions (If EEX Group has the reporting obligation report uploads must include the full set of records.)
• The timeline for modifications is 10:00 – 14:00 CET.

MiFID II EUREX Reporting

Under Art. 58.1 MiFID II Eurex Deutschland as a regulated market is required to provide BaFin with daily reports on the positions held by their clients (and the clients of the clients up to the end client) in listed commodity derivatives, emission allowances and derivatives thereof.

To enable Eurex Deutschland to fulfil its reporting obligation, the related exchange participants have to comply with Art. 58.3 MiFID II and provide breakdowns of their positions and positions of their clients (on end-customer level) in listed commodity derivatives to that trading venue (i.e. Eurex Deutschland) on a daily basis (t+1) until 2pm CET/CEST the latest.  EEX submits the participant reports on behalf of EUREX and has implemented an interface to provide position data for the commodity derivatives traded on Eurex.