Regulatory reporting technology provider Cappitech has developed a new regulatory solution that is complimenting the company’s MiFIR reporting product. With a little over a month remaining until the implementation of RTS 27 reports under MiFID II, the company’s new product grows Cappitech’s MiFID II suite of offerings that already includes Transaction Reporting, Trade Reporting to an APA and Best Execution monitoring.
Cappitech’s RTS 27 product is based on Capptivate, our cross-regulation reporting platform. The foundation of our technology environment, Capptivate is a highly scalable platform that can be customized to handle inputs of diverse file formats and outputs of numerous regulatory reports.
RTS 27 and 28
Starting from the end of June 2018, every execution venue, market maker and systemic internalizer and other liquidity providers will have to begin publishing an execution report under the rules of RTS 27. Alongside with RTS 28 which was implemented at the end of April, both standards are part of the best execution section of the MiFID II regulatory framework.
Compliance with the rules aims to ensure that investors are better protected and enables companies to show prospective clients the real value of their services. The EU’s MiFID II regulations are delving deep into pre-trade and post-trade transparency requirements for all financial instruments subject to the rules.
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Under RTS 27 and 28, companies are forced to comply with some new information publication requirements about the execution quality for their clients. The rules could also affect order execution policies of the firms.
Preparing for the Deadline
Compliance with RTS 27 requires regulation know-how and experience with handling large datasets. The legal framework provides companies with information about what needs to be reported. The technical side of the reporting process extracts trade information, enriches it and prepare the final reports. Firms then need to validate the information the full life-cycle of the report.
What makes RTS 27 unique is that it includes both pre and post-trade information and the final reports are published to the public. As such, simply extracting execution data isn’t sufficient to create the report and any potential erroneous report is made known to everyone who wants to review the report.
To support the dual nature of RTS 27, Cappitech works with clients to receive both execution and pre-trade data. Cappitech then combines the information, injects filters based on RTS 27 market size requirements and calculates order and trade averages. The data is then prepared to the standards of the nine tables of RTS 27.
Commenting on the launch, Ronen Kertis, CEO of Cappitech Regulation stated “Best execution standards has become a point of focus among regulators. RTS 27 contains a lot of information that will be made available to the public and viewed by clients and regulators. Therefore, we wanted to provide a systematic and cost-effective solution to help investment firms get RTS 27 right.”