to make the
meet specified format and content rules before they
are sent to the NCA. Firms are responsible for the
completeness, accuracy, and timely submission of
the transaction reports, even if they have outsourced
reporting to an ARM. Nevertheless, ARM providers
will need to ensure they are taking the necessary steps
to properly report on their clients’ behalf.
Due to the previously mentioned expanded reporting
requirements and rule changes concerning delegated
reporting, MiFID II will significantly increase the
number of firms obligated to file a transaction report.
As a result, ARM services will be in high demand from
firms seeking a reporting solution. A large number of
third-party service providers stand ready with ARM
solutions to assist firms with meeting their reporting
While all ARMs will essentially be the same in terms
of their ability to submit the actual transaction report
to the NCA, different levels of service offerings will
differentiate one provider from another.
Important considerations for firms in selecting an
- Costs for the services offered.
- Depth of support, for example, assistance with not
only technology but also compliance issues, such
as client updates about any regulatory reporting
- Ease of connectivity with a firm’s data systems.
- Ability to also support regulatory reporting for other
Challenges and opportunities
MiFID II regulatory changes to the transaction reporting framework will present challenges and opportunities for both firms and service providers.
Firms must devote resources to make the necessary changes to technology systems, or create new
systems, to source the reportable data. New business
processes will also need to be implemented in order
to accurately track transaction details that must be
reported. However, this preparation process may lead
to improved operational efficiencies for firms, allowing
them to be better prepared to tackle future regulations
as well as other regulatory reporting requirements.
Firms and service providers supporting MiFID II
clients must continue to monitor for any transaction
reporting updates issued by regu-
lators. In addition, providers must
ensure that their offered services
continue to be in compliance with
any updated regulatory guidance.
However, there are good opportunities for providers to build on
existing relationships, and to create
new ones, as firms look to leverage
service offerings from providers to
assist with their transaction reporting and other MiFID II requirements. And regardless of whether
firms are dealing with MiFID II or
any other regulations, the quality
of the delivered services will be key
to a lasting relationship.