Instruments captured by EU MiFIR reporting, divergence from UK MiFIR requirements
With the departure of the UK from the EU it was expected that at some point, the EU and the UK regulatory regimes will start diverging. With Regulation 2024/791 amending MiFIR, the EU has introduced new asset classes which are now captured by the MiFIR reporting obligation. The amended rules came into effect on the 28th of March 2024. The new instruments captured under EU-MiFIR are not, currently, subject to the UK’s MiFIR reporting obligation.
As per the amended MiFIR, the obligation to report transactions (Article 26.2) has been amended and applies as follows:
- financial instruments which are admitted to trading or traded on a trading venue or for which a request for admission to trading has been made, irrespective of whether such transactions are carried out on the trading venue, with the exception of transactions in OTC derivatives other than those referred in Article 8a(2), to which the obligation shall apply only when carried out on a trading venue;
- financial instruments where the underlying is a financial instrument that is traded on a trading venue, irrespective of whether such transactions are carried out on the trading venue;
- financial instruments where the underlying is an index or a basket composed of financial instruments that are traded on a trading venue, irrespective of whether such transactions are carried out on the trading venue;
- OTC derivatives as referred to in Article 8a(2), irrespective of whether such transactions are carried out on the trading venue.
While points (a) through to (c) introduce nothing new, the inclusion of (d) adds 2 additional types of OTC derivatives.
Types of instruments captured by the new MiFIR reporting obligation
As per Article 8a(2) of EU MiFIR the following types of instruments denominated in EUR, JPY, USD or GBP are now captured by the MiFIR reporting obligation.
- Type 1: OTC derivatives declared by the EU as subject to the clearing obligation under EMIR, and where those derivatives are interest rate derivatives have specific tenors (years till maturity);
- Type 2: OTC derivatives – Credit Default Swaps that reference a Global Systematically Important Bank (G-SIB) and that are centrally cleared or, that reference an index comprising G-SIBs and that are centrally cleared.
For illustration purposes, please see below select Asset Class and Instruments captured (indicative and non-exhaustive).
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For the list of G-SIBs, refer to the Financial Stability Board (FSB) as of November 2023.
For the instruments subject to clearing, under EU EMIR, refer to ESMA’s registry section 1.1.
*Disclaimer the above is for information purposes only. For an up-to-date list of instruments captured consult with the applicable regulation, lists of instruments subject to clearing, FSB announcements and your compliance risk management teams.
How is MAP FinTech going to assist
Our MiFIR Transaction Reporting service allows clients to seamlessly report their transactions in Financial Instruments as required by the Markets in Financial Instruments Regulation (MiFIR, Article 26). Clients can report to National Competent Authorities either directly or through an Approved Reporting Mechanism using our award-winning Polaris Platform.
Transaction data is seamlessly processed, validated, and submitted in the required format through our fully automated service. Solution includes consolidated data feeds, automatic checks, a robust reconciliation engine and continuous regulatory updates. Clients enjoy optimised technology, cost savings, expert training, and transparent monitoring of their reporting via the Polaris dashboard.
For more information or to schedule a demo, please contact our team of experts.
