Traded on Trading Venue (TOTV) – MiFID II/MiFIR Reporting

What is a Trading Venue

There are three categories of trading venue:

• • • Regulated Markets (RMs)
      Regulated markets are traditional exchanges where securities like stocks and bonds are listed and traded. As the name suggests, these markets are regulated by an NCA as a regulated market, and would include venues such as the London Stock Exchange.

• • • Multilateral Trading Facilities (MTF/MTFE)
      An MTF is different from a regulated market and is regulated by an NCA as an alternative to a traditional stock exchange. The Financial Conduct Authority (FCA) classifies an MTF as “an investment firm or market operator that operates a multilateral system in accordance with non-discretionary rules”.

• • • Organised Trading Facilities (OTF)
      Organised Trading Facilities (OTFs) are multilateral trading venues that aren’t regulated markets or MTFs. According to the FCA “an OTF means a multilateral system which isn’t a regulated market or an MTF, and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact”.

Reporting Obligations for TOTV Transactions

Under MiFIR, Article 26 stipulates the reporting requirements for ToTV transactions. These reporting obligations aim to promote market transparency and regulatory market oversight. The specific obligations are as follows:

• • • Pre-trade transparency: applies to instruments traded on RMs, MTFs or OTFs. Trading venues must publish bids and offer prices alongside quantities for equity and equity-like products, allowing the creation of an order book. Order books enable market participants to make informed decisions based on real-time market data, helping to promote fairness within markets.
    • Post-trade transparency: the revised MiFID II dictates that trading venues should publish post-trade data, including price, volume and trade time, as soon as possible after execution. For large in-scale trades, some waivers can be granted to prevent large orders from suffering from adverse market movements.

Failure to Meet Reporting Obligations for Transactions ToTV

Maintaining compliance with TOTV reporting requirements is essential for firms who wish to avoid regulatory intervention and potential penalties. The most important metric for meeting TOTV standards is ensuring accurate and timely reporting for all qualifying transactions.

European firms must comply with the European Securities and Markets Authority’s (ESMA’s) reporting guidelines and UK firms should align with the Financial Conduct Authority’s (FCA’s) guidance. Keeping up to date with guidance and news published by market regulators allows firms to prepare for upcoming regulatory changes, enabling them to remain compliant and ensure their reporting systems are in line with TOTV requirements.

Novatus En:ACT is a SaaS reporting platform designed to streamline your transaction reporting compliance and adhere to your G20 reporting obligations.

For more information on how Novatus En:ACT can assist your firm’s regulatory reporting compliance, get in touch, and one of our experts will get back to you shortly. – Failure to Meet Reporting Obligations