MiFIR Compliance: Eye on ISIN

ISIN as the unique identifier is considered to be critical component by industry vendors and compliance experts

In advance of the MiFID II reporting requirement enhancements, slated to begin in earnest during January 2018 , the array of unique identifiers for the broad range of financial instruments, including derivatives has created somewhat of a conundrum for regulators, market data providers and the assortment of exchanges and vendors charged with processing transactions in accordance with Markets in Financial Instruments Regulation (MiFIR). That said, the vast majority of industry thought-leaders and best practice experts are aligned in their view that ISIN (International Securities Identifier Number) should be the primary securities identifier for global securities.

WatersTechnology recently conducted interviews with top experts and posed the following question: Of the types of information necessary for MiFIR compliance—such as identifiers, instrument classification data and transaction reporting—what is proving most challenging to manage?

Below is an excerpt of responses published in WatersTechnology most recent edition:

“Any unique identifier helps to ensure a smooth mapping process to the data universe. The trading venues in the EU are amending their feeds according to MiFID II/MiFIR RTS 14—draft regulatory technical standards on data disaggregation. Under RTS 14, the trading venues are required to ensure pre-trade and post-trade transparency data by disaggregating the data from their feeds into asset classes. Data feeds need to be amended accordingly and a clear identifier like ISIN helps ensure high-quality mapping and, ultimately, higher data quality.” Jacob Gertel, senior project manager, legal and compliance data, SIX Financial Information

“MiFIR reporting is very much an evolution from the current MiFID reporting requirements. While the main driver behind MiFIR reporting remains the same—to enable the national competent authorities (NCAs) to detect and investigate potential instances of market abuse—it is clear that regulators are demanding more information in order to do a better job. Instrument identification and client identification are absolutely vital to the regulators’ efforts. They have made it clear in the regulatory technical standards (RTSs) that the ISIN will be the sole instrument identifier used in a transaction report. There are also significant advantages in using an ISIN, as ESMA has made it clear that none of the 15 reference data fields within the reporting template need to be populated if an ISIN has been used to identify the instrument.” David Nowell, head of regulatory compliance and industry relations, UnaVista, London Stock Exchange Group

For the entire article from WatersTechnology, please click here