IHS Markit has launched a new service for compliance with MiFID II’s RTS 28 which requires firms to report on their five most-used trading venues for each asset class.
The service will allow firms to outsource data classification processes and use proprietary calculations to categorise trades to produce detailed reports.
Michael Aldridge, managing director of trading services at IHS Markit, explained it can be easy to underestimate the effort required to comply with RTS 28.
“Smaller firms with uncomplicated trading activity might find compliance straightforward, but as a firm’s activity increases in complexity, so does its reporting obligation,” he said.
The rules could see some investment firms have to create up to four documents for each of the 22 asset classes covered by the regulation.
Within each asset class trades must be arranged by customer type and order type, and those reports must be published online.
“As with so many financial industry regulations, the risk with RTS 28 is that compliance teams focus on the mechanics of compliance rather than adding value to the enterprise by truly monitoring and analysing execution quality,” Aldridge added.
“We’ve created the calculation engine and programmed the business logic into our system, so that investment firms don’t have to spend time or resources aggregating and classifying trade data.”