On November 8, the UK Financial Conduct Authority (FCA) published issue 54 of Market Watch, its newsletter on market conduct and transaction reporting issues.
With the January 3, 2018 implementation date of the revised Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) fast approaching, Market Watch contains articles relating to:
- Legal entity identifiers (LEIs)—the FCA reminds firms with transaction reporting obligations that they must ensure they have an LEI and keep it updated. It has produced a leaflet that executing firms can use in their communications with clients. It also reminds clients that are legal entities or structures, including company charities or trusts, to make arrangements to obtain an LEI code if they want executing firms to continue to act on their instructions or make decisions to trade on their behalf from January 3, 2018, onwards.
- ESMA instrument reference data—the FCA highlights the launch by ESMA of its Financial Instruments Reference Data System database.
- FCA transitional arrangements—on January 12, 2018, the FCA is decommissioning its current transaction reporting system, ZEN. The FCA will use its new FCA Market Data Processor IT system (MDP) to meet the new transaction reporting requirements under MiFIR. Market Watch also contains information on the FCA’s previously stated approach to the January transition away from the pre-MiFID II reporting regime.
- MiFID II and market data obligations—the FCA’s MDP industry test environment is available, and the FCA encourages firms to begin testing as soon as possible.
- Authorizations and variation of permissions—the FCA advises firms that, if they have not yet applied for new permissions under MiFID II, they urgently need to submit an application with all the required information.
Market Watch is available here.