Reporting experts warn buy-side of fiduciary risk under MiFID II

Panel of MiFID II reporting experts at The TRADE’S Future of Post-Trade event discussed challenges for buy-side firms ahead of the deadline.

The buy-side has been warned EU authorities will likely hand out fines for failing to report transactions accurately and correctly as required under MiFID II.

Speaking at The TRADE’s Future of Post-Trade event in London this week, a panel of trade reporting experts agreed the current quality of reporting has considerable room for improvement.

Elena Gaetini, European head of business development and governmental affairs for RegTek.Solutions, told delegates poor quality of reporting could see the European Securities and Market Authority (ESMA) take fiduciary action.

“Under MiFID II the regulator will want to see the transactions reported well and of better quality… they will probably take this as a chance to begin handing out fines, which is a position ESMA has taken lately,” she said.

Len Delicaet, head of regulatory reporting strategy at TRAX, added this is particularly the case for buy-side firms who may be hit harder with fines than sell-side firms.

“The buy-side might feel the fiduciary risk more acutely than the sell-side. The sell-side can pay the fine, brush themselves off and get back to business as if nothing happened. Whereas we find with the buy-side, it can have more of an impact,” he explained.

A poll of the audience revealed 63% of delegates expect to combine in-house technology with solutions from third-party vendors to meet the MiFID II reporting requirements.

Per Loven, commercial director for Boat Services and the London Stock Exchange’s TRADEcho business, told delegates that from the regulator’s point of view, MiFID II will provide cleaner data.

He added buy-side firms must find an approved publication arrangement (APA) providers that “can do the heavy lifting beforehand, and not just the publishing of transactions”.

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