FlexTrade, a provider of trading execution and clearing services, announced on Tuesday that it has integrated the SmartStream Reference Data Utility (RDU) into its FlexTRADER EMS (execution management system). The integration offers mutual clients the ability to embed SmartStream RDU’s Systematic Internaliser (SI) Registry information directly into the send order ticket, providing clarity on counterparty SI status.
Under the European Securities and Markets Authority’s (ESMA) Markets in Financial Instruments Directive II (MiFID II), firms must identify whether the counterparty they are trading with is an SI for the instrument they are trading in. This must be done so that both counterparties can determine whether or not they are the one that should be reporting the trade.
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The new service is likely to be extremely useful for asset managers and hedge funds. MiFID II specifies what defines an SI but does not provide a mechanism by which a firm can determine whether or not their counterparty is an SI.
As a result of this, buy-side firms have not built compliance infrastructure that would enable them to speed up MiFID II’s reporting requirements. Instead, firms rely on their SI counterparties for those reporting functions.
Peter Moss, CEO of the SmartStream RDU, commented on the partnership with FlexTrade, saying:“The SI Registry offers transparency that is needed as part of the trade workflow and integration into FlexTRADER EMS making it easy for our mutual customers to make more informed choices. With the mandatory SI regime commencing from the 1st September this year, we see more brokers offering SI services and growing demand from clients to understand who is offering what,”