CME Group has revealed to Finance Magnates that it will be winding down its Abide Financial and NEX Regulatory Reporting businesses, as well as its European and Australian Trade Repositories by the 30th of November, 2020.

In a statement provided to Finance Magnates, CME Group said that having evaluated its business portfolio following the acquisition of NEX Group in November of 2018, it has decided to close down the operations of part of its regulatory services.

Although the CME Group will be closing down its European and Australian Trade Repositories, it will retain its United States (CFTC) Swap Data Repository and its Canadian Trade Repository services.

“During the coming months, CME Group will work closely with all clients and regulators to ensure a smooth transition and an orderly wind down of the impacted services,” the statement from CME Group said.

The Australian CME Trade Repository is licensed by the Australian Securities and Investments Commission (ASIC) to operate as a Trade Repository for foreign  Exchange   Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term, commodities, credit, equity and interest rate asset classes. The European Repository is regulated by the European Securities and Markets Authority ( ESMA  ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of the EU financial system by ensuring the integrity, transparency, efficiency, and orderly functioning of securities markets, as well as enhancing investor protection. ESMA fosters supervisory convergence among securities regulators and financial sectors through its work with other EU supervisory authorities. ESMA is independent; there is full accountability towards the European Parliament, where it appears before the Economic and Monetary Affairs Committee, at their request for formal hearings. What Functions Does ESMA Perform?The purpose of assessing risks to investors, markets, and financial stability is to spot emerging trends, threats, and vulnerabilities, and where possible opportunities in a timely fashion so that they can be responded to. ESMA uses its unique position to identify market developments that threaten financial stability, investor protection, or the orderly functioning of financial markets. ESMA’s risk assessments build on and complement risk assessments made by others. The purpose of compiling a single rulebook for European financial markets is to enhance the EU Single Market by creating a level playing field for investors and issuers across the EU. ESMA’s four activities are linked. Insights gained from risk assessment feed into the work on the single rulebook, supervisory convergence, and direct supervision, and vice versa. European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of the EU financial system by ensuring the integrity, transparency, efficiency, and orderly functioning of securities markets, as well as enhancing investor protection. ESMA fosters supervisory convergence among securities regulators and financial sectors through its work with other EU supervisory authorities. ESMA is independent; there is full accountability towards the European Parliament, where it appears before the Economic and Monetary Affairs Committee, at their request for formal hearings. What Functions Does ESMA Perform?The purpose of assessing risks to investors, markets, and financial stability is to spot emerging trends, threats, and vulnerabilities, and where possible opportunities in a timely fashion so that they can be responded to. ESMA uses its unique position to identify market developments that threaten financial stability, investor protection, or the orderly functioning of financial markets. ESMA’s risk assessments build on and complement risk assessments made by others. The purpose of compiling a single rulebook for European financial markets is to enhance the EU Single Market by creating a level playing field for investors and issuers across the EU. ESMA’s four activities are linked. Insights gained from risk assessment feed into the work on the single rulebook, supervisory convergence, and direct supervision, and vice versa. Read this Term) and covers all asset classes.

CME Repositories have been a key industry player

In response to the news that CME Group will be closing down certain repositories, Sophie Gerber, principal of legal firm Sophie Grace and the co-CEO of TRAction Fintech said to Finance Magnates: “It’s disappointing that the market is losing a piece of key regulatory infrastructure at a time of such global turmoil.

“TRAction have been in the market since early 2015 and the participation of CME repository along with its regulatory reporting arm known as Abide and then NEX have been a key industry player that we have learnt from.

“As regulatory reporting is becoming so heavily scrutinised by ASIC and ESMA now, TRAction will ensure any clients seeking transition will be well supported by our offices in London, Sydney and Cyprus along with our client base that already includes over 80 firms.

“We hope not to see any further casualties of firms that provide support to so many brokers for this key compliance obligation.”

“Clients will be worried about consistency of trade reporting in the transfer process, especially during Covid. Key challenges to sourcing alternative reg reporting solutions including needing to figure out if they can use existing data format alongside whatever additional services are in place (validation etc), personal data management etc.,” RegTech vendor Cappitech told Finance Magnates.

“There’s a procurement and commercial challenge alongside the technical challenge. There will be nuances for different regimes eg EMIR where they’ll need to port all positions, not just open ones. Obviously, a vendor that already has connections and relationships with both CME and other TRs will be important/easier. Also, the less the data has to be manipulated on the client side (because a vendor can take existing data and transform it) the better,” a Cappitech partner added.