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FCA Publishes Market Watch Newsletter 53 on LEIs, Market Data and SIs under MiFID II

On September 18, the UK Financial Conduct Authority (FCA) published the latest edition (Number 53) of its periodic newsletter Market Watch. In it the FCA has included articles and guidance on the following:

MiFID II Legal Entity Identifiers (LEIs): The FCA has reiterated its previous guidance that starting January 3, 2018 (when MiFID II comes into full effect across the European Union and European Economic Area), all firms subject to MiFID II transaction reporting obligations must have an LEI, as must all eligible clients of these firms. The eligibility criteria include those ‘persons’ that are a legal entity or structure, including a company, charity or trust. The FCA reminds firms that there is a requirement to renew their LEIs annually.

Market data obligations: The FCA has commented that FCA-regulated firms will be required to use its market data processor (MDP) to meet their MiFID II market data obligations beginning January 3, 2018. Firms will have to submit market data to the MDP in the form of transaction reports, instrument reference data, transparency reports, double volume cap reports and commodity derivative position reports. Firms that want to be able to submit such reports need to sign and return a confidentiality agreement (available on the FCA website), so as to request a copy of the market interface specification (MIS)—which sets forth various technical details required to format and submit market data to the FCA.

MDP entity portal and the data extracts facility: The FCA has also reminded firms that its MDP portal is currently in its testing phase and will be ‘live’ beginning January 3, 2018. From January 3, firms will have to use the MDP entity portal if they want to request extracts of transaction reports from the FCA (which would be required for the purposes of reviewing and reconciling data submitted to it). There is a limit of one daily request per firm, regardless of how many users the firm has. There is also a 10 million record limit, when a request is based on a date range.

Systematic internalizers (SIs) and the instrument reference data obligation: The FCA has noted that, under Article 27(1) of MiFIR, SIs must submit instrument reference data to the FCA for financial instruments falling under the scope of the transaction reporting regime that are traded on its system, as opposed to those instruments admitted to trading on a trading venue.

©2017 Katten Muchin Rosenman LLP

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About this Author

Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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