FIX Trading Community Addresses MiFID II Obligations with New Release

The non-profit, industry-driven standards body FIX Trading Community has rolled out the final iteration of its Recommended Practices for Best Execution Reporting. The final release comes ahead of the implementation of MiFID II, which includes new obligations for Best Execution Reporting, namely RTS 27 and 28.

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RTS 27 outlines reporting requirements for execution venues executing client orders in MiFID financial instruments. By extension, RTS 28 specifies all upcoming reporting requirements for investment firms executing client orders on execution venues. The document can be accessed by the following link. It provides guidance to all groups ahead of MiFID II’s passage this January.

Game changing Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term

The implementation of MiFID II will dramatically reshape the financial services industry. It includes a series of revamped reporting and execution obligations facing venues in a bid to shore up transparency across the industry. Various studies have shown firms to be largely behind schedule in terms of reconciling their MiFID II obligations, with the January 3, 2018 deadline looming.

Rebecca Healey, Co-Chair EMEA Regulatory Subcommittee, FIX Trading Community, Head of EMEA Market Structure and Strategy, Liquidnet, commented: “With the MiFID clock ticking, it was critical for all market participants to be able to deliver accurate Best Execution reports to the regulator in time.”

For its part, FIX Trading Community is helping provide clear guidance to groups on how precisely to populate reports dictated under MiFID II, with specific consideration to RTS 27 and RTS 28.

Introduced back in 2007 under MiFID I, the Best Execution for the European Financial Markets framework will be somewhat different under MiFID II. It includes the introduction of new requirements on what data must be published to the market to help firms comply with their Best Execution mandate.

“By working together across industry disciplines the FIX working group has produced a valuable framework for firms to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term. By providing the regulator and the wider industry with standardised information on best execution, FIX has made an important contribution to necessary enhanced transparency around best execution,” explained Ms. Healey.

This is hardly a new development, given the ongoing debate and discussions executed by FIX members over the past two years. Over this period, members have touched on various elements of the European Securities and Markets Authority’s (ESMA) terminology with multiple updates.

Furthermore, FIX members have successfully engaged with EU National Competent Authorities (NCA). Past efforts have resulted in the latest document put out from the FIX Trading Community. The document is instrumental in outlining which entities must report under these new requirements, while also focusing on what data and the frequency it must be published in.

“MiFID II’s Best Execution Reporting requirements were always going to be a challenge for trading venues and investment firms alike. With a concerted effort from a broad range of stakeholders from across the financial community, we’ve been able to provide a really valuable guide for the industry and, in addition, the changes to the FIX protocol to support standardised reporting,” noted Alex Wolcough, Director of Appsbroker.