MiFID II. The impact on firms in Asia. November 2017

Transcription

1 MiFID II The impact on firms in Asia November 2017

2 Agenda Setting the Scene Less than 2 months to go, what do I do? Key areas of MiFID Governance & Training Regulatory Intelligence and E- Learning Legal Entity Identifiers Pre-Trade Transparency &Trade and Transaction Reporting Best Execution Research Unbundling Q&A

3 MiFID II The basics The Markets in Financial Instruments Directive (MiFID) has been the cornerstone of EU financial services law since 2007 when it was originally directed towards equity instruments. In response to the global crisis and G20 initiatives the regime will be extended, MiFID II, to cover non-equity instruments as of 3 rd January, 2018 and extend transparency by the introduction of new pre and post trade reporting requirements on trading venues. MiFID and MiFID II apply to all 27 EU Member States and the additional 3 members of the EEA, namely Iceland, Norway and Liechtenstein. Although MiFID II directly effects EU registered Investment Firms it also impacts organizations outside of the EU who deal with the EU be it through clients, Counterparties or branches that may be EU based. Companies who trade in EU based venues will now have those trades published by those venues.

4 REGULATION: MiFID II PURPOSE WHO IS IMPACTED? Aims to achieve more efficient, resilient and transparent financial markets to strengthen investor protection, through shifting OTC trading to organised multilateral regulated trading platforms PURPOSE WHO IS IMPACTED? Entire financial market players (buy side & sell side) including liquidity platforms, data vendors and other service providers MAJOR CHALLENGES AN OVERVIEW OF MIFID II EFFECTIVE DATE Investor protection 3 rd January 2018 Best Execution Market structure Governance MAJOR CHALLENGES EFFECTIVE DATE Transparency Research & Unbundling

5 MiFID II Third Country Firm & Equivalence Non EU registered companies impacted are referred to as Third Country Firm. Such a firm is defined by ESMA as a company that would be deemed an Investment Firm if it were registered inside the EU as it carries out Investment Services If a non EU registered company wishes to trade in the EU and does not have a branch established within the EU, then the EU must deem that company s parent regulations equivalent to those of MiFID For example a company dealing with Professional or Eligible Counterparty clients may not need a branch but will register with ESMA under Article 46(4) or MiFIR. The company will need to ensure that Equivalency of their home state regulator has been adopted by the EU The list of Third Country Firms will ultimately be available on the ESMA website 5

6 MiFID II Consequences of not complying Various banks have fallen foul for incorrect or failing to report transactions to the regulators since MiFID was introduced and MiFID 2 extends this reach to non equity asset classes These obligations apply to EU registered entities of non EU firms and also the non EU branches of EU registered firms 15 Financial penalties for transaction reporting failures MiFID I BAML Deutsche Bank RBS Credit Suisse As can be seen by the chart Regulators fines for breaches in transaction reporting are becoming more punitive over time. Source: MiFIR reporting requirements: Not for the faint hearted. Aite Group,

7 EXCERPTS FROM FCA RECENT SPEECH Currently we capture around 20 million transaction reports per day and we estimate this will increase under MiFID II to around million transactions, in excess of 50 million orders per day or a total of over 1 trillion data points per year. Many firms that have been working well to prepare for next year and they should feel assured and confident that they can continue to work with us to meet the starting line. At the same time, we cannot create a floor for compliance below the required MiFID II standards and so our disposition is likely to be different where firms have made no real or genuine attempt to be ready or where key obligations are deliberately flouted. Speech by Mark Steward, Director of Enforcement and Market Oversight at the FCA, delivered at the AFME European Compliance and Legal Conference, Sept 20 th

8 WORD CLOUD FROM PAN ASIAN REGULATORY SUMMIT IN HK, OCT 2017

9 FROM MAY TO OCTOBER HOW READY IS YOUR FIRM FOR MIFID II? MiFID doesn't apply to me We think it applies but have not done much yet We are still working through what it means We have made decisions and are going to implement soon We are on track to be ready for Jan 3rd 2018 May Webinar October Summit

10 WHERE DO YOU SEE THE BIGGEST CHALLENGE? Compliance is more complex than expected No lessons Other Don't know Costs will exceed original expectations Timing takes longer than expected Additional resourcing will be required Recognition of need for a changing business model

11 Navigating the MiFID II Challenge Less than 2 months to go

12 Navigating in the lead up to 3 rd January 2018 Less than 2 months to go, what do I do? Policy Analysis Process Analysis Systems Analysis Prioritize What is a must have (e.g. LEIs) What can you do to demonstrate you are working to solve for MiFID Asian regulators bringing in elements of MiFID II Singapore, HK and now Japan bringing in principles of Best Execution LEI s being used by a number of regulators for OTC derivative reporting

13 How does MiFID II affect firms in Asia? Policy Analysis Impact varies tremendously depending on nature of business as well as nature of group structure of Asian Firm Are you an EU Entity? YES Assessment needs to be done at the entity level No However, at a macro level we are seeing two themes: 1. Direct impact Do you have an EU Branch? YES MiFID Applies Non-EU Firms with regulated businesses in the EU No Non-EU Firms dealing with EU counterparties Non-EU Firms trading on EU venues Non-EU Firms offering investment services in the EU Trading models / Booking models changing 2. Indirect impact Helping EU counterparties comply with their home regulations Market structure changes requiring Asian firms to adopt Best Practices Are you providing investment services to EU clients? No Do you trade with EU counterparties? No YES YES MiFID may not directly impact BUT firm may be required to assist EU entities with obligations Competitive dynamics changing Asian firms may need to change business practices Not subject to MiFID 13

14 MiFID II impact assessment yes Is the entity a venue? (SI*/OTF/RM/MTF) no yes (SI***) Pre-Trade Transparency BEX: Quality of Execution Reporting Transaction Reporting Art. 26(5)** (IF) (SI) EEA Investment Firm EEA Systematic Internalizer Non-EEA entity Reference Data Reporting Is the entity EEA domiciled? Is the entity an Investment Firm? no yes Post-Trade Transparency Record Keeping Algo Trading (HFT) *SI requirements are imposed by asset class and SI-relevant activity ** Applicable to SI as a direct requirement and to Non-EEA investment firms as an indirect requirement Direct Electronic Access ***OTF, RM, MTF requirements are not differentiated no No MiFID II / MiFIR obligations Clock Synchronization Note: no Trading Obligation for Cash Equities Commodity Derivatives Position Limit Reporting, Benchmarks and Portfolio Compression are not listed Best Execution Is the entity an FC or NFC+ /an investment firm equivalent? yes Transaction Reporting Trading Obligations for Derivatives Indirect ETD Clearing

15 Trade Life Cycle 3 rd Country Broker, Local clients, EU products EU Non EU PRE-TRADE TRADE POST-TRADE End Client Trade Confirmation Order 3 rd Country Firm (Broker) ORDER ENTRY CHANNELS Order ORDER PROCESSING SYSTEMS INVESTMENT OPERATIONS Record Keeping IMMUTABLE STORAGE Order Market Structure Price ARM NCA 3RD PARTY BROKER Execution TRADING VENUES Transaction Reporting (t+1) TXR Post Trade information EXCHANGE/VENUES (REGULATED MARKET, MTF, OTF) Reference Data ToTV Thomson Reuters Solutions APA (TRADEWEB) MARKET DATA ELEKTRON REAL TIME REFERENCE DATA DATASCOPE +/SELECT Market Infrastructure GLEIF/LOU - LEI ANNA DSB - ISIN APA/OTF/RM/MTF NCA LIMITS ISINs / LEIs /ToTV / Benchmarking /Venue status / Instrument Data ESMA

16 Thomson Reuters helping firms navigate MiFID II Governance Regulatory Intelligence E-Learning

17 MiFID or MiFIR Regulatory Intelligence Effective 3 rd January 2017, MiFID / MiFIR is proving mission critical for organisations globally to comply

18 MiFID & MiFIR Impact Analysis & News Stay up to date with changes and news related to MiFID regulation

19 MiFID Regulation Track MiFID Regulation and upcoming compliance dates and effective dates

20 MiFID Survival Guide Contributed by Clifford Chance

21 Training your teams E-Learning

22 Thomson Reuters helping firms navigate MiFID II The Legal Entity Identifier & Thomson Reuters Verified Entity Data

23 LEI PROFILING MARKET CHALLENGE? Extensive LEI adoption in MiFID II The Issue Legal Entity Identifier (LEI) codes are increasingly being mandated by international regulators to uniquely identify parties to trades or transactions in the prescribed reporting templates This requires all in-scope counterparties to apply for and annually re-certify an LEI for their firm as a passport to trade Under new MiFID II rules, from January 3 rd 2018, for the first time No LEI = No Trade This presents the prospect of potential liquidity issues for existing & new clients of in-scope firms who do not have this code available to report for each of their counterparts Our Proposal A MiFID II focussed, LEI matching programme, to assist reporting FI s to identify and resolve gaps within their LEI universes by: Profiling client portfolios to return allocated LEIs and identify missing LEIs Identifying invalid LEIs Returning clients own codes to aid data ingestion Regulatory soundbites: For the purpose of ensuring certain and efficient identification of investment firms responsible for the execution of transactions, those firms should ensure that they are identified in the transaction report submitted pursuant to their transaction reporting obligation using validated, issued and duly renewed legal entity identifiers. In order to safeguard the effectiveness of market abuse surveillance of legal persons, (13)Member States should ensure that LEIs are developed, attributed and maintained in accordance with internationally established principles. For similar reasons, investment firms should obtain their clients LEIs from their clients before providing services which would trigger reporting obligations in respect of transactions effected on behalf of those clients. ESMA Regulatory technical and implementing standards Annex I MiFID II / MiFIR The FCA communicated in CP15/43 its expectation that MiFID investment firms (excluding collective investment firms but including authorised credit institutions), operators of trading venues and UK branches of third country investment firms must comply with transaction reporting obligations. From 3 January 2018 firms subject to MiFID II transaction reporting obligations will not be able to execute a trade on behalf of a client who is eligible for a Legal Entity Identifier (LEI) and does not have one. UK Financial Conduct Authority Under MiFID II rules, LEI use is much broader than just identification of the transacting parties. LEI codes must be returned for each of the following fields in the reporting templates: RTS 22 Reporting Obligations Executing entity Submitting entity Buyer Buyer decision maker Seller Seller decision maker Transmitting firm for Buyer Transmitting firm for Seller RTS 23 Instrument Reference data Issuer or operator of trading venue Underlying Issuer (Derivatives) RTS 20/21 Position Limit & Reporting (Commodities) Reporting entity Position holder Ultimate Parent entity

24 The LEI in an evolving regulatory landscape Broad global regulatory adoption of the LEI standard. Looking through an Asian lens Singapore Mandates the LEI for all classes of derivatives transactions under the Securities & Futures Act Australia Requests/encourages the use of the LEI under: ASIC Derivatives Transaction Rules (Reporting) 2013 ASIC Market Integrity Rules for Competition in Exchange Markets ASIC Derivative Transaction Rules (Clearing) 2015 Hong Kong Requests the use of LEI under: OTC Derivatives Trade Repository Reporting Service Reference Manual India Mandates the LEI for all participants in the OTC Markets for Rupee Interest rate, foreign currency, credit derivatives, in India. (Phased effective August 2017) 24

25 Sourcing, Storing & Maintaining LEI Data Identify in-scope MiFID II entities (clients, counterparties, issuers) Confirm which have valid LEI today Outreach explain MiFID II requirements to firms without LEIs Link LEI to internal / Reporting data Cross-reference to internal lists and maintain Direct to LOUs issuers of LEIs Feed LEIs into MiFID II Transaction Reporting & others Ongoing: Ensure new inscope entities have an LEI Ongoing: Ensure client LEI is re-certified annually 25

26 The Market Challenge Regulatory Identifiers SWIFT BIC FATCA GIIN The Legal Entity Identifier is still a relatively new data set often tagged onto existing systems without adequate data management/governance. Many firms simply ensured compliance with Dodd-Frank or EMIR derivative reporting datasets, avoiding a broader implementation until now. Resultant disparate data repositories provide inconsistent views of (LEI) data completeness we don t know what we don t know. Lack of awareness within the industry of the full scope of Regulatory requirements LEI is a single component of a farreaching MiFID II regulatory landscape, many firms have focussed on LEI sourcing of their direct counterparts, ignoring the other use cases such as Issuers. The Service Two-tier service model. Tier 1 - automated matching, Tier 2 automated matching & manual review for low-confidence matches. Report-based service providing subscribers with LEI status of their in-scope entities (1). Provides subscribers with immediate health check on MiFID LEI compliance status Allows firms to focus on key down-stream workflows no action, client outreach etc Client C Entity list Client A Entity list Client B Entity list 1. Client Entity list submitted in pre-defined format 3. LEI gaps/statuses returned. LEI profiling. Potential for ongoing maintenance updates of LEI changes to existing list. LEI module OMGEO ALERT codes GLEIF LEI Data AVOX data Company Registry No s 2. Avox matches against the Avox database to identify the equivalent LEI data (100% LEI coverage maintained daily) Availability General: no requirement for prospect to be an existing Avox client or have an MDS subscription Delivery - File based service Frequency - ad hoc, but likely to be repeat due to increased LEI allocation (2) plus monitoring of LEIs with Renewal date prior to 3 rd January Fee model Tier 1 per file, volume banded. Tier 2 based on file fee + chargeable analyst day rates Maintenance proposed introduction of LEI module Q requiring MDS subscription (1) Clients will define their own in-scope entities. (2) GLEIF estimate 50k+ new LEIs to be allocated H k new LEI s were issued in the 2 months preceding EMIR go live.

27 Thomson Reuters Managed Data Service - a broader solution MATCH ENRICH MAINTAIN Client sends an internal record. Avox matches client internal record to 2.5+ million records in Avox database. Match client entities of interest population to existing AVID records Avox enriches record, populating 58 data fields of core entity record. Proactive monitoring; registries, LEI, GIIN, BIC etc. Client changes and challenges trigger analyst reviews Collaborative - updates benefit all participants Avox maintains data on an ongoing basis. Process happens in a shared pool. Existing records revalidated Annual record reviews as minimum Analysts use over 1500 public authoritative sources to gather entity data in 190 countries 4/5 sources are used for each validation. 4 eye checks on all work and database profiling Clients internal entity identifier will be mapped to Avox MDS record (Avid), returned to facilitate integration with client s downstream workflows.

28 Thomson Reuters helping firms navigate MiFID II Pre Trade Transparency & Trade and Transaction Reporting

29 Trading Obligation Trade and Transaction Reporting Obligation applies directly on EEA firms and Venues Potential INDIRECT impact on Firms in Asia Trading with EEA counterparties Trading on EEA venues Value driver around data and content generated Trading obligation Derivatives Mandated trading of standardized derivatives on exchanges and electronic trading platforms by requiring certain derivatives to be traded on a RM, MTF or OTF or certain trading venues in third countries that have been considered equivalent Trading obligation Shares Investment firms will be required to trade shares that are admitted to trading on a RM or traded on a trading venue on a RM, MTF or SI or a third country trading venue that has been assessed as equivalent for these purposes. Trading obligations result in instruments being classified as Traded on a Trading Venue (TOTV) While the concept of TOTV is clear for instruments that are centrally issued and that are fully standardised, such as shares and bonds as well as exchange traded derivatives, it is now clarified for OTC derivatives ESMA is of the view that only OTC derivatives sharing the same reference data details as the derivatives traded on a trading venue should be considered to be TOTV and, hence, subject to the MiFIR transparency requirements and to transaction reporting according to Article 26(2)(a) of MiFIR Scope and extent of Trade and Transaction reporting has been expanded significantly MiFID II Asset Classes EQ and EQ Options Futures and Options on Futures Money Markets Funds, Indices and Warrants Commodities and Energy Sovereign & Corporate Debt Global OTC Derivatives ANNA DSB

30 Changing Market Structure for Trading Changing market structure for trading will present challenges for market participants, but also opportunities for new trading strategies Trading venues Multilateral Bilateral RMs MTFs OTFs SIs OTC Regulated Markets (RMs) are exchanges that list their own products Multilateral trading facilities (MTFs) are like exchanges but can admit OTC products to trading Organised Trading Facilities (OTFs) are designed to capture broker crossing networks Systematic Internalisers are firms who deal on own account when executing client orders Bilateral trading Listed e.g. futures * OTFs will only relate to bonds, structured finance products, emission allowances or derivatives. In addition, orders on an OTF must be executed on a discretionary basis.

31 Thomson Reuters & Tradeweb - APA

32 GETTING THE DATA RIGHT Post MiFID II Trading and Investment Universe BEST EXECUTION (RTS 27, 28) TRANSPARENCY WAIVERS (3, 4) & TRANSPARENCY (RTS 1, 2) MARKET DATA REPORTING (RTS 22, 23, 24, 25) MAR CROSS-OVER DATA PUBLICATION & ACCESS (RTS 13, 14, 15, 16) TRANSACTION REPORTING (RTS 22, 23) SI DETERMINATION MONITORING DATA FOUNDATIONS MARKET DATA FEEDS RM s APA s MTF s OTF s Contributed Pricing HISTORICAL DATA Level 1 data Level 2 data REFERENCE Classification Codes LEI Flags and Indicators Waivers Total Market Size CLIENT DATA Order/Execution System Information (Outages/Disruptions) Internal Prices Thomson Reuters Elektron Real Time Feeds Thomson Reuters Tick History Time Series Thomson Reuters DataScope Client

33 MIFID II Thomson Reuters Reference Data Reference Data is the foundation that drives MiFID reporting processes Determines eligibility of an instrument or trade needs to be reported Determines timing of reporting requirement based on liquidity and size of traded, which drives wavers or deferrals MiFID establishes entirely new way that reference data is exchanged between market participants We have identified over 180 reference data fields to be used for MiFID II analysis, monitoring, and reporting purposes.

34 External Sourcing Example Data: Data Sourcing Complexity for Transaction Reporting The transaction report is made up of 65 fields that have to be filled from various sources. Counterparty Counterparty & Instrument Data Sources Data Sources HR Information Buyer Information Instrument Details Investment Decision Maker Seller Information Transaction Details Buyer Decision Maker Seller Decision Maker External Databases General Fields (Trading Venue) Transaction Report (65 Fields) Client Information Systems Investment Decision Maker Buyer Information Seller Information Internal Sourcing MIC (Market Identifier) LEI (Legal Entity Identifier) Execution and Order Systems ISIN CFI (Classification of Financial Instr.) Transaction Details Instrument Details Reportable Instrument List Trade Executor Details 34

35 Thomson Reuters helping firms navigate MiFID II Best Execution

36 Best execution under MiFID II Best Execution: MiFID I to MiFID II The overarching MiFID II best execution obligation requires firms to take all sufficient steps to obtain the best possible result, taking into account a range of execution factors, when executing client orders or placing orders with (or transmitting orders to) other entities to execute. This changed from MiFID I where client were only obliged to provide reasonable steps. Since the introduction of MiFID, rules have required firms to assess best execution by taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. 36

37 What is happening in Asia? MIFID II HAS HEIGHTENED THE BEST EXECUTION STANDARD, AND SERVES AS A DRIVING FORCE FOR FUTURE REGULATORY MANDATES GLOBALLY 37 SINGAPORE HAS TAKEN ACTION HONG KONG TO FOLLOW The revised Securities and Futures (Markets) Regulations will heighten best execution standard, where an approved exchange or a recognized market operator must take all sufficient steps to obtain, when executing orders, the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order In Nov 16 Circular, Hong Kong Securities and Futures Commission s (SFC s) has commenced a thematic review with focus on understanding the market practices in delivering best execution, at the same time that Europe is updating its requirements through MiFID II. SFC will then perform a benchmarking exercise of its regulatory requirements and best execution market practices against major regulations (e.g. MiFID II, EMIR, etc.).

38 Thomson Reuters Best Execution Solutions BestX & Velocity Analytics 8 OVERVIEW Independent, specialist solution, to define, achieve & demonstrate Best Execution in FX under MiFIDII CLIENT SEGMENT Mainly buy-side (asset managers, hedge funds, corporates, wealth managers), and small sell-side ASSET CLASS & VENUE COVERAGE FX specialist, FI at a later stage All venues; exclusive integration with FXall DELIVERY / DEPLOYMENT Ready to use out of the box Hosted OTHER MiFID II compliance certified by LinkLaters LLP OVERVIEW Powerful analytics platform for developing custom multi-asset TCA and MiFIDII compliance analytics CLIENT SEGMENT Mainly sell-side (large banks) Large buy-side / asset managers ASSET CLASS & VENUE COVERAGE Multi-Asset All venues DELIVERY / DEPLOYMENT Deployed and tailored to customer sites Hosted, fully managed service Elastic Analytics service being evaluated OTHER Additional MiFID II and upcoming Regulatory modules being created

39 Thomson Reuters helping firms navigate MiFID II Research Unbundling

40 Research & Unbundling: The New Legislation Mifid II The Markets in Financial Instruments Directives II go into effect January 2018 No free services Research and research services are of material value, and cannot be free A systematic policy for research spending must be provided the investment firm shall not accept any monetary or nonmonetary benefits provided by any third party in relation to the provision of the service to clients. MiFID II Article 24 Paragraph 8 Any research that is tailored or bespoke or rationed... cannot be a minor non-monetary benefit. This would include privileged access to research analysts, bespoke reports or analytical models, investor field trips, or services linked to research such as corporate access, which by their nature are limited in access and/or can have material value ESMA Consultation Paper ESMA 2014/549 Obligation to provide clients with a written policy on research funding at minimum the qualitative criteria against which the research is assessed the formula used to the allocate the research budget at the end of each period, the process for reviewing the quality of research received AMF public consultation Asset managers can no longer pay for research with trading commissions Paying for Research Paid for out of the firm s resources (P&L) or an research payment account (RPA) RPA funded via a specific charge to the client or via a commission sharing account (CSA). Budgeting & Tracking Required to define a research budget in advance on a per client basis Must set and regularly assess a research budget which must be agreed with clients and must regularly assess the quality of research purchased and its ability to contribute to better investment decisions. 40

41 Research a structural change Article from: The Edge Singapore Huge variance across the market Sell Side in the news Barclays USD k Macquarie (UK) USD 24k 5 users JP Morgan USD 10k Buy Side two camps Pay for research themselves Vanguard JP Morgan AM M&G Aberdeen Jupiter Pass on research cost to clients Janus Henderson Schroders Amundi Man Group Asian impact Sell Side cannot provide free research as it would be a form of inducement Asian sell side seeing opportunity to monetize research play to their strengths Buy Side asset owner mandates looking for fee transparency 41

42 MiFID II research solution: Helping the Buy-side & Sell Side manage, track and optimize research consumption

43 Research Management Console Sell Side Enhancements to more easily manage a large number of document groups Create Product Groups for common document group combinations More descriptive document group labels User Name and ID are fixed to the page Division between fixed and dynamic parts Scroll through document groups independently

44 Entitlement API Sell Side Research contributors who choose greater segmentation can manage entitlements via TRKD API Thomson Reuters MiFID Enhancement was to make all RMC functionality available through the Entitlement API Current capabilities Answer request for entitlement Search eligible clients Proactively entitle / disentitle Enhancements Usage Reporting Entitlement Reporting Transparency Functions Custom Templates

45 Pay-To-View (P2V) Sell Side Monetizing Research P2V is in the development phase Contributors create P2V research collections Non-Clients can purchase access to these collections Collections do not include access to portals, analysts, etc. Clients pay Thomson Reuters Thomson Reuters Pays contributors a royalty

46 MiFID II Research Unbundling Buy-side Supporting Research Value Identification Starmine provides an unbiased Sell Side analyst performance evaluation focusing on analyst accuracy with Price Target and Earnings accuracy. Analyst recommendation rating Estimate accuracy rating Analyst scorecard details

47 MiFID II Research Unbundling Buy-side Rate and score research in the document (DUE in H2 2017) Analyst Research Ranking 1-5 Ranking for each report read by each analyst Consensus report score Overall consensus analyst score

48 MiFID II Research Unbundling Buy-side Research Discovery Quickly Identify Initiation Reports, Up vs. Down Revisions, if an Estimate, Price Target, or Recommendation Changed Powerful Filter/Search Capability Based Upon Expansive Research Tagging StarMine Analyst Accuracy Ratings

49 MiFID II Research Unbundling Buy-side Research Value Insight Enterprise Search And Discovery Search and discovery in Eikon enables keyword and topic search across all Research, Transcripts, Filings and News. Expand search with intelligent synonyms Commingled results Curated topics Snippets navigation

50 MiFID II Research Unbundling Buy-side Entitlement tools for customers and partners Customer need Greater control over broker entitlements Granular delivery of research Block research from specific brokers for compliance Thomson Reuters Provides: Research Management console for sell side granular entitlement Buy-side client suppress specific contributors

51 MiFID II Research Unbundling Buy-side Research readership and reporting tools for customers and partners Customer need Assess usage by analyst, team or at a firm level Evaluate the usage by broker or Sell Side analyst Thomson Reuters Provides Usage tracking at user-level or firm-level directly through Eikon and export Show page 1 downloads & document downloads Provide detailed usage files on ad-hoc requests

52 ONEAccess via Eikon ONEAccess app will be accessible via Eikon Depending on user permissions the user will have access to relevant ONEAcces apps (Calendar Tool, Resource Tracking, Broker Vote) TR will be providing ONEAccess with research readership data to integrate into their Resource Tracking tool ONEAccess Mifid2 research unbundling products 1 Resource Tracking Tool (Basic and Premium) 2 Broker Vote Tool 3 Calendar Tool 52

53 HOW THOMSON REUTERS SUPPORTS YOUR MiFID II OBLIGATIONS Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Regulatory Change Management - Thomson Reuters Regulatory Intelligence Thomson Reuters solutions: - Thomson Reuters Eikon - Thomson Reuters Intelligent Tagging - Thomson Reuters Research Management Console - Thomson Reuters StarMine Monitor Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson Reuters DataScope - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson ONE - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters Lipper Fund Rankings - Thomson Reuters Regulatory Change Management - Thomson Reuters Regulatory Intelligence - Thomson Reuters Starmine Analyst Rankings - Thomson Reuters Velocity Analytics Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters FXall - Thomson Reuters FX Trading - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics We provide best in class regulatory change and mapping workflow solutions to power risk radars. We and our partners enable buy-side firms to track, control access, and aggregate all research and associated services from the sell-side to help manage budgets and meet research unbundling requirements. We enable sellside firms to measure and control the dissemination of their research so they can effectively monetize their offering. We help you meet HFT specific transaction reporting requirements with access to modular tools and industry-leading reference data. We provide state-of-theart best execution analytics, data and applications to help you prove best execution. We provide solutions and expertise to support your MiFID II Investor Protection requirements. We provide access to financial reference data, applications and solutions to identify and report. RESEARCH PERMISSIONING & UNBUNDLING HFT & STRUCTURAL CHANGE BEST EXECUTION INVESTOR PROTECTION REGULATORY AUTOMATION & WORKFLOW MAPPING PRE- & POST-TRADE TRANSPARENCY Thomson Reuters is uniquely positioned to enable our customers to fulfil their obligations and be competitive under MiFID II TRANSACTION REPORTING & RECORD KEEPING REFERENCE DATA TRADING VENUES SYSTEMATIC INTERNALISER (SI) DETERMINATION APPROVED PUBLICATION ARRANGEMENTS (APAS) & PUBLICATION SERVICES We are committed to bringing transparency to the market through preand post-trade data sourced from SIs, Approved Publication Arrangements and trading venues. We help you meet HFT specific transaction reporting requirements with access to modular tools and industryleading reference data. We provide solutions to enable organisations to determine if they have breached Systematic Internaliser (SI) thresholds. We provide the ability to publish pre- and post-trade data and reports in near real-time via an APA to support your trade reporting requirements. We provide access to aggregated MiFID II risk, liquidity, volume, additional pricing, and referential content to support your analysis and reporting. Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson Reuters FX Trading - Thomson ONE - Thomson Reuters DataScope - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters FXall - Thomson Reuters Matching - Thomson Reuters Regulatory Intelligence (TRRI) - Thomson Reuters Trade Notification (TRTN) - Tradeweb APA Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson ONE - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters Intelligent Tagging - Thomson Reuters Research Management Console - Tradeweb APA Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP)

54 QUESTIONS