Join Walther Navarette, Platform Developer at Novatus Global, as he introduces the MiFIR reporting capabilities of the Novatus En:ACT platform. Explore how En:ACT streamlines transaction reporting, reconciliation, and compliance oversight, minimizing errors and reducing operational burdens. With built-in validation and continuous monitoring, En:ACT ensures accurate, timely submissions, enabling firms to confidently navigate evolving MiFIR regulations and maintain compliance with ease.
MiFIR Transaction Reporting with
Novatus Global
Understanding MiFIR Transaction Reporting requirements, compliance obligations, deadlines, and how Novatus Global’s help to support firms meet regulatory standards.
What is MiFIR Transaction Reporting?
MiFIR Transaction Reporting is a regulatory requirement under the Markets in Financial Instruments Regulation (MiFIR).
Article 26 of MiFIR (Regulation (EU) No 600/2014) requires investment firms and operators of trading venues to report complete and accurate details of transactions they conclude in financial instruments to their respective National Competent Authorities (NCAs). These reports must be timely and include key information on the financial instrument traded, the parties involved, and details of the persons arranging or executing the transaction.
The primary objective of MiFIR transaction reporting is to enhance market integrity by allowing regulators to detect, prevent, and investigate market abuse.
For that reason, it is important that the data submitted by market participants accurately reflects the circumstances surrounding the execution of a transaction.
The data collected is monitored and analysed by Member State NCAs and the European Securities and Markets Authority (ESMA) in the EU, and the Financial Conduct Authority (FCA) in the UK.
Who is Required to Report Under MiFIR Transaction Reporting?
Investment firms and operators of trading venues are required to report details of transactions:
01
Under Article 26(1), an investment firm, as defined in MiFID II Article 4(1)(1), is required to report details of transactions that they execute in financial instruments. What constitutes an execution of a transaction is further detailed in RTS 22 (Commission Delegated Regulation (EU) 2017/590).
02
It is important to note that this requirement extends to transactions executed through local branches of third-country firms. For instance, EU branches of non-EU firms are subject to EU MiFIR Transaction Reporting requirements in the same manner as EU investment firms.
03
Under Article 26(5), an operator of a trading venue is required to report details of transactions executed on its systems by any member, participant, or user not otherwise subject to the reporting obligation in Article 26.
Are There Exemptions from MiFID II/MiFIR Reporting?
Any persons not subject to the provisions in MiFID II under Article 2 and any entities exempt from the definition of an investment firm under Article 3 are not required to comply with the requirements under Article 26 of MiFIR.
There are also exemptions for certain transactions:
- Transactions which do not meet the definition of execution of a transaction under Articles 2 and 3 of RTS 22. Such transactions include, and are not limited to post-trade assignments, portfolio compressions, contracts arising exclusively for clearing or settlement purposes, exercises, etc.
- Securities financing transactions (SFTs) are fully exempt in the UK as their reporting obligation is covered by UK SFTR. In the EU, SFTs must only be reported under MiFIR if the counterparty is a member of the European System of Central Banks (ESCB)
- Transactions that meet all the conditions for transmission under Article 4 of RTS 22
- Transactions where there is no change in ownership of a financial instrument are not required to be reported (e.g. transactions within desks of the same financial institution)
MiFIR Transaction Reporting Deadlines and Requirements
Investment firms and operators of trading venues are required to report complete and accurate details of their reportable transactions as soon as technically possible and no later than the next business day following the execution of the transaction
The report should include information on both the market side of the transaction and any associated allocations (if applicable). As such, an investment firm may need to submit more than one report.
For example, if an investment firm receives an order from a client to buy a financial instrument and subsequently executes the order on a trading venue by dealing on its own account, then the investment firm would need to submit two transaction reports.
- One in which the investment firm is the buyer and the seller is the trading venue
- Another where the investment firm is the seller and the client is the buyer
The same transaction could be reported in a single submission if the investment firm were dealing in an agency capacity or any other trading capacity.
Investment firms must be mindful of their trading capacity and allocations to properly determine the number of reports required to be submitted.
Reporting entities only need to report their part of the transaction within a chain and therefore do not need to look forward or backward in the chain beyond their immediate client and counterparty.
Reports must be submitted either directly to the National Competent Authority (NCA), through an Approved Reporting Mechanism (ARM), or through the trading venue on which the transaction was executed.
Transaction reports consist of 65 fields to specify details relating to:
- The financial instrument being bought or sold (through the use of an ISIN or product characteristics in fields 42-56)
- The quantity and price of the financial instrument
- Date and time of the execution
- Details of the buyer and seller (and corresponding decision makers) which includes names, surnames, and dates of birth for natural persons
- Details of the investment decision maker
- Identity of the firm or algorithm responsible for the execution
It is important to note that the MiFIR Transaction Reporting regime is currently undergoing consultations pending the publication of a new RTS 22 as part of the MiFIR review.
Proposed changes include the addition of new fields, such as the effective date, the designation of the entity responsible for reporting, and the transaction identification code (TIC). Meanwhile, certain fields, like the post-trade flag indicator and the short selling flag, are set to be removed.
We will update this publication as new information becomes available.
Is MiFIR Transaction Reporting Single or Double-Sided?
MiFIR Transaction Reporting requires each eligible entity to submit one or more reports depending on their trading capacity.
Consequences of Non-Compliance with MiFIR Transaction Reporting
Non-compliance with the provisions in MiFIR Article 26 can result in enforcement actions by the overseeing NCAs. These may include fines for continuous failures to comply with regulatory requirements along with costly remediation and back-reporting exercises.
Firms must ensure at all times that data submitted is accurate, complete, and timely and must submit an Errors and Omissions report promptly should they identify any deficiencies in their reporting process.
Recently, on 21 January 2025, the FCA in the UK imposed its first fine for MiFIR Transaction Reporting failures, issuing a £99,200 penalty to Infinox Capital Limited for failing to submit transaction reports on its single-stock CFDs.
How Novatus Global Can Streamline Your MiFIR Transaction Reporting
Points (3) and (4) of Article 15 of RTS 22 require firms to have arrangements in place to ensure their transaction reports are complete and accurate. These arrangements include testing the reporting process and regular reconciliation of front-office books and records against data samples provided by NCAs or to reports submitted by ARMs or trading venues on the firm’s behalf.
The reconciliation shall include checking the timeliness of the report, the accuracy and completeness of the individual data fields, and their compliance with the standards and formats specified in Table 2 of Annex I.
Novatus En:Act platform ensures all data submitted to trade repositories meets and exceeds data quality validations required by regulators. Our platform consists of over 1,000 rules, spanning eligibility, industry best practices, and anomaly checks created by our in-house SMEs to ensure full coverage and the highest levels of data quality. Each rule is linked to the relevant source document and a rationale is provided for easier analysis.
Further, En:Act analytics capabilities provide management a high-level view of their reporting performance across regimes, asset classes, and delegated reporting entities.
En:Act also offers full books and records reconciliations to data received from ARMs or from the FCA’s Market Data Portal (MDP).
By using En:Act, firms can be certain that they are fulfilling their obligations under Article 15 of RTS 22
MiFIR Transaction Reporting FAQs
What Are the Most Common MiFIR Reporting Mistakes?
- Buyer and seller details, such as use of default values, nicknames, or initials for first names and surnames
- Failure to use the highest priority national identifier as prescribed by RTS 22. The FCA in the UK has recommended firms enhance their due diligence processes to ensure proper identification is requested from their clients
- Inconsistency in the population of investment and execution decision maker fields. Regulators have identified instances in which the details of the head of desk, head of trading, or another person responsible for a department were populated. It is expected that the details of the specific individual making the investment or execution decision (including algorithm IDs) are populated in these fields
- Incorrect use of code “INTC” for aggregated orders for a single client. This code is reserved for aggregated orders for multiple clients
- “INTC” account not flat at the end of the trading day
- Inconsistent or invalid trading venue identification code (TVTIC) for the relevant trading venue
- Inconsistent price and quantity values
- Inconsistent venue of execution values when transmitting orders for execution to another firm. The value to be reported should be “XOFF”
- Incorrect population of field Investment firm covered by Directive 2014/65/EU. Branches of third-country investment firms reporting field investment firm are expected to populate the value “true”. The value “false” is reserved for transaction reports submitted by trading venues
Can MiFIR Transaction Reporting Be Delegated?
Article 26(7) allows firms to delegate the submission of the transaction report to an Approved Reporting Mechanism (ARM) or to a trading venue.
Investment firms remain responsible for the completeness, accuracy, and timeliness of reports submitted to an NCA.
However, where the investment firm reports transactions through an ARM or trading venue acting on the firm’s behalf,
the ARM or trading venue will be responsible for failures in completeness, accuracy, and timeliness attributable to such
third party. Investment firms must still take reasonable steps to ensure reports submitted on their behalf fully comply
with the requirements in Article 26 and RTS 22.
Are Crypto Transactions Reportable Under MiFIR?
The reportability of crypto assets is an ongoing topic of discussion in the industry. A transaction on a crypto asset
follows the same rules as other financial instruments and is reportable if they meet the criteria specified in Article 26.
For example, derivatives on crypto assets that are admitted to trading on trading venues would qualify as eligible
financial instruments and be subject to Article 26 obligations.
Crypto assets such as cryptocurrencies are not currently in scope of MiFIR as the exchanges in which these assets are
traded do not qualify as a trading venue under MiFIR.
Regulators are working on guidance to delineate the reporting obligations under EMIR, MiFIR, and MiCA in relation to
crypto assets.
What Is a Reportable Transaction Under MiFIR Transaction Reporting?
The reportability of transactions for purposes of MiFIR Transaction Reporting relies on four main concepts
- Meaning of transaction
- Execution of a transaction
- Product being a financial instrument as defined in MiFID II
- Traded on trading venue (ToTV), underlying traded on trading venue (uToTV) status of the financial instrument
The scope of instruments subject to transaction reporting is set to change once the new RTS 22 is published and will cover the following:
- Financial instruments 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 executed on a trading venue, except for OTC derivatives other than those referred to in Article 8a(2) of MiFIR to which the obligation will only apply if the transaction is executed on a trading venue
- Financial instruments where the underlying is a financial instrument traded on a trading venue, irrespective of whether such transactions are executed on a trading venue
- Financial instruments where the underlying is an index or basket composed of financial instrument that are traded on a trading venue, irrespective of whether such transactions are executed on a trading venue
- OTC derivatives referred to in Article 8a(2), irrespective of whether such transactions are carried out on a trading venue
Article 8a(2) financial instruments include:
- OTC derivatives that are denominated in EUR, JPY, USD, or GBP that are:
Subject to the clearing obligation under EMIR, are centrally cleared, and, in respect of interest rate derivatives, have a contractually agreed tenor of 1, 2, 3, 5, 7, 10, 12, 15, 20, 25, or 30 years - Single-name CDS that reference a global systematically important bank and that are centrally cleared
- CDS that reference an index comprising global systematically important banks and that are centrally cleared
What Is the Difference Between MiFIR Trade Reporting and MiFIR Transaction Reporting?
The main difference between the transparency reporting and transaction reporting obligations under MiFIR is in terms of their intention, products in scope, and reportable fields.
The transparency regime in MiFIR focuses primarily on providing investors and the public with access to real-time price data on executed transactions (often delayed by 15 minutes) on transactions to ensure fair pricing, competition, and market efficiency.
MiFIR transaction reporting, on the other hand, is intended to assist competent authorities and ESMA prevent, detect, and investigate market abuse.
As a means of comparison, MiFIR Post-Trade Transparency reports require 17 fields for equity and 9 fields for non-equity instruments, while MiFIR Transaction Reporting requires 65 fields.
Further, data for purposes of transparency is anonymous and does not contain any details on the buyer, seller, or people arranging and executing the transaction.
Are interest rate swaps reportable under MiFIR Transaction Reporting?
Yes, interest rate swaps are reportable as C4 financial instruments under MiFIR Transaction Reporting if they are admitted to trading or traded on a trading venue. Please refer to section “What Is a Reportable Transaction Under MiFIR Transaction Reporting” for further details on eligible instruments.
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Meaning of transaction
The meaning of a transaction is defined in Article 2 of RTS 22. Transactions are defined as acquisitions or disposals of financial instruments.
Acquisitions and disposals include purchases or sales of financial instruments, entering or exiting a derivatives contract, as well as increases and decreases in notional amounts of a derivatives contract
There are several exemptions from the meaning of a transaction as specified in Article 5 of RTS 22. Please refer to the section on “Exemptions” above for further details.
Execution of a transaction
A firm is deemed to have executed a transaction when it provides or performs any of the activities:
- Reception and transmission of orders in relation to one or more financial
instruments - Execution of orders on behalf of clients
- Dealing on own account
- Making investment decisions for clients under a discretionary mandate
- Transfer of financial instruments to or from accounts
Where an investment firm has met all conditions for transmission as outlined in
Article 4 or RTS 22, the firm should not be deemed to have executed a transaction
and therefore does not have a reporting obligation.
Financial instruments as defined in section C of Annex I of MiFID II
These instruments include:
- Transferrable securities (such as stocks and bonds)
- Money-market instruments
- Units in collective investment undertakings (UCITS)
- Emission allowances
- Derivative contracts relating to securities, currencies, interest rates, credit risk, emission allowances, physical commodities, and other variables such as freight and weather
Traded on trading venue (ToTV) and underlying traded on trading venue (uToTV) status
Under the current EU MIFIR Transaction Reporting regime in force, eligible financial
instruments include:
- Financial instruments admitted to trading or traded on a trading venue, or where
a request for admission to trading has been made (ToTV) - Financial instruments where the underlying is a financial instrument traded on a
trading venue (uToTV) - Financial instruments where the underlying is an index or basket composed of
financial instruments traded on a trading venue (uToTV)