MiFID II introduces a requirement that entities providing data reporting services (DRSs) need pre-authorisation (or, for the operators of trading venues, verification) by the relevant regulator. That regulator will then supervise the provision of DRSs on an on-going basis.
A body that provides any of these services is called a data reporting services provider (DRSP). The types of DRSPs are:
- Approved reporting mechanisms (ARMs) - an ARM is authorised to provide the service of reporting details of transactions to competent authorities on behalf of investment firms.
- Approved publication arrangements (APAs) - an APA is authorised to provide the service of publishing post-trade transparency reports on behalf of investment firms.
- Consolidated tape providers (CTPs) - a CTP is authorised to provide the service of collecting post-trade transparency reports of specific financial instruments from regulated markets, multilateral trading facilities, organised trading facilities and APAs. They then consolidate these reports into a continuous electronic live data stream providing price and volume information per financial instrument.
ARMs and Trade Data Monitors (TDMs) currently operating reporting services in the UK will need to submit new applications to be authorised as DRSPs if they wish to continue providing these services under MIFID II.
You can begin the authorisation process from 30 January 2017, with the exception of a non-equity CTP, where firms should apply for authorisation by March 2019.
MiFID II introduces two forms for the initial authorisation (or verification) of DRSPs:
We have also prepared guidance notes to clarify aspects of completing both the application form and the notification form.
The guidance notes clarify, for example, the correct approach to completing the notification form for list of members of a management body, where a market operator seeks authorisation to operate a DRSP and the members of its management body are the same as the members of the management body of the proposed DRSP.
Applicants will need to submit both of the completed forms, along with any supporting documentation, to MiFiDII.Applications@fca.org.uk. Alternatively, these can be posted to:
Authorisations Support Team
Financial Conduct Authority
25 The North Colonnade
For applications received from 3 July 2017, we will determine an application for an authorisation or verification within six months, beginning with the date on which we receive the completed application.
The Market Data Processor (MDP)
Entities that need to submit MiFID II market data to us should follow our MDP on-boarding process and timetable to be ready for when the new regime comes into force in January 2018.
An ARM seeking to fulfil its market data provision obligations must be able to demonstrate compliance with our market interface specification (MIS) as a condition of authorisation.
An APA and CTP do not have to demonstrate compliance with the MIS as a condition of authorisation. However, an APA and a CTP will have market data provision obligations under MIFIR and will be required to submit data to us.
We encourage APAs and CTPs seeking a connection to our MDP system, to begin the MDP on-boarding process and establish compliance with the MIS as soon as possible.
In CP15/43 and CP16/43, we have consulted on provisions in MAR 9 in the FCA Handbook, which further clarify the timescales under which the MDP on-boarding process should be commenced by APAs and CTPs seeking a connection to the MDP.
In CP16/19, we consulted on the on-boarding fees for conforming to the technical standards for the MDP.
The regulatory framework for UK DRSPs is set out in the following draft sources (these will be updated in the future):
- HM Treasury legislation in the form of the Data Reporting Services Regulations 2016 (“DRS Regulations”). The DRS Regulations transpose Title V of MiFID II
- MAR 9 of the FCA Handbook, as consulted on in CP15/43 and CP16/43
- RTS 13 - regulatory technical standards on the authorisation, organisational requirements and the publication of transactions for data reporting services providers
- ITS 3 - technical standards for the standard forms, templates and procedures for the authorisation of data reporting services providers and related notifications
- Provisions of MiFIR with relevance to DRSPs
- RTS 3 - regulatory technical standards on the volume cap mechanism and the provision of information for the purposes of transparency and other calculations
- MiFID Organisational Regulation - organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive
- MiFIR Delegated Regulation - definitions, transparency, portfolio compression and supervisory measures on product intervention and positions