Trax Transparency Solution

Transcription

1 Trax Transparency Solution Your Fast Track to European Regulatory Change Comply with Confidence

2 European Markets are Experiencing Unprecedented Change Impact of MiFID II Transparency The EU Markets in Financial Instruments Directive II ( MiFID II ) is intended to go live in January 2018, bringing about unprecedented change to European capital markets. MiFID II shall impact all areas of the trading lifecycle, encompassing sales, trading, research and operations and shall have implications across the market including both investor and dealer firms. Pre- and posttrade transparency (trade reporting) will necessitate market participants to: Make public certain quotes prior to execution Publish trades in near real-time post-execution Determine Systematic Internaliser (SI) status Assess the liquid status of instruments in order to anticipate the transparency implications Apply pre-trade transparency waivers and post-trade transparency deferrals Trax is ready to help you meet your transparency obligations today.

3 A Complete Transparency Solution Across All Asset Classes The Trax Transparency Solution will include the tools needed to help firms comply with confidence. The Trax Transparency Solution will enable investors and dealers to actively manage their regulatory obligations through Trax Insight, our fully customisable web-based system. As an Approved Reporting Mechanism (ARM) under MiFID I, Trax has a legacy in the regulatory reporting space and a deep understanding of the impact of regulatory change. The Trax Transparency Solution includes: APA (Approved Publication Arrangement) supports pre- and post-trade transparency Rules engine simplifies challenges of pre-trade waivers and post-trade deferrals SI services to help Systematic Internalisers meet their obligations Monitoring tools including real-time monitoring, alerts, industry benchmarking and MIS, through Trax Insight A broad range of connectivity to National Competent Authorities (NCAs) across Europe APA Demonstrator allows firms to test and validate their preparedness for MiFID II today Trax Insight web-based front-end: What s included in the Trax Transparency Solution: Reporting Firm Trax Engine Instrument Eligibility and Filtering Reference and Market Data Validation and Enrichment Deferral Management Customisable Self-filter and/or Self-defer Validation layer: warning or rejection Control and Exceptions GUI Real-time monitoring MIS and benchmarks Data Publication

4 The Regulatory Challenge and the Trax Solution At-A-Glance RULES BUSINESS IMPACT WHAT TRAX OFFERS PRE-TRADE TRANSPARENCY MiFIR: Article 3, 4, 5 MiFIR: Article 8, 9 MiFIR: Article 14,15,17 MiFIR: Article 18 SI DETERMINATION MiFID II: Article 4(1)(20) MiFIR: Article 2(1)(12) MiFIR: Article 15(1) MiFIR: Article 18(4) SI REFERENCE DATA REPORTING MiFIR: Article 27 Systematic Internalisers (SI) must make public firm quotes in respect of liquid instruments (all asset classes) Systematic Internalisers (SI) must make public their quotes on a regular and continuous basis (equity-like only) Waivers may be available Pre-trade transparency only required if a firm is an SI SI regime is for investment firms trading on a frequent, systematic & substantial basis Quarterly assessment on the last 6 months of data Investment Firm will have to notify their NCA of SI status SI to submit reference data to NCA daily All financial instruments admitted to trading or traded Ensure completeness and accuracy Pre-trade solution Trax manages all quotes and will: Identify quotes eligible for publication Determine and apply waivers Publish quotes customisable by the client Control and Exception front-end through Trax Insight Visibility control of quotes and real-time monitoring MIS and benchmarking reports Assist firms to determine their SI status: Dynamic instrument level assessment Alerts generated as firms approach SI status Leverage Trax ARM reporting information to complete SI determination Trax Insight front-end to view SI status: View an indicative SI status during quarterly time period, per instrument Ability to identify specific instruments for MiFID II eligibility and cross-reference against SI determination Submit reference data to the relevant NCA, by extracting details from its database Exception alert raised in case of correction and resubmission of incomplete/inaccurate instrument Audit trail of submission Reporting capabilities to NCAs Compliance with required standards and formats

5 POST-TRADE TRANSPARENCY MIFIR: Article 6, 7 MiFIR: Article 10, 11 MiFIR: Article 20 MiFIR: Article 21 Investment firm to publish prices and volumes of trades Each individual transaction shall be made public once through an APA, within the time limits Responsibility to report falls primarily on SI or seller. Buyer to report in case of non-eea counterparty Deferred publication may be granted in certain circumstances APA solution Trax manages all trades and the APA will: Identify if a trade is eligible for reporting Assess reporting responsibility to ensure no duplicate reporting Validate and enrich content (transparency flags) Identify, apply and manage deferrals Publish when required Trax runs a logical rules engine with filters including: Reportable/eligible instrument list Legal entities, instruments, markets, SI database Exemption, temporary suspension, deferral INSTRUMENT CLASSIFICATION MiFID II: Article 4 (25) Investment firms will be responsible for applying deferrals and waivers when trading off-venue Only MiFID II eligible securities will be subject to transparency requirements Access to liquid classification, as well as client s MiFID II requirement Search and download function DATA QUALITY MiFIR: Article 7 MiFIR: Article 11 MiFIR: Article 20 MiFIR: Article 21 Investment firms are liable for quality of the trade reporting Assist firms with assessing the quality of their reporting through MIS and monitoring tools Peer and industry benchmarking for relative reporting quality across a range of metrics, such as: Rejections Late trade reporting Over reporting analysis Use of default values

6 Available Now: The Pre-MiFID II Trax Transparency Solution A comprehensive service built in close collaboration with the industry in response to complex regulatory change APA DEMONSTRATOR What Trax offers: Trax has developed an APA rules engine to provide clients with a testing environment to validate various scenarios such as: Deferral Trade validation Benefits: Provides an early opportunity to view the effect of the post-trade transparency regime. Test technical readiness ahead of implementation deadline. SI DETERMINATION What Trax offers: Trax has developed tools to assess whether a firm will be an SI at instrument level. Benefits: Provides an indication whether investment firms will become an SI at instrument level. Assess to what extent you will be subject to pre-trade and reference data reporting.

7 LIQUID CLASSIFICATION What Trax offers: Trax can assess whether an instrument would be classified as liquid or illiquid based on a consolidated MiFID II eligible instrument list. Benefits: Seamless identification of liquid and illiquid instruments. Indication of pre- and post-trade reporting obligations. MIS What Trax offers: Trax can analyse its client s trading activity to determine the impact of transparency requirements under MiFID II regime. Benefits: Provides insight on post-mifid II implementation trading landscape, ahead of implementation deadline.

8 The Trax Advantage Trax Insight gives you control over your transparency, regulatory reporting and matching activity through a secure web-based dashboard Experience in delivering a calibrated transparency service Axess All is the first intra-day trade tape for the European fixed income markets The Trax rules based engine simplifies the challenges of the transparency requirements by managing deferrals/waivers and filtering, such as identifying reporting responsibility Operational Reference Data team maintaining a full MiFID II eligible instrument list Defined levels of service with out of hours support Critical mass with leading investment firms committed to the Trax Transparency Solution About Trax Trax is a leading provider of capital market data, trade matching and regulatory reporting services to the global securities market. In 2015, Trax processed 1.1 billion transactions on behalf of its user community, including 13.3 million fixed income transactions. Trax estimates that it processes approximately 65% of all fixed income transactions in Europe as part of its post-trade service offering. Trax is based in London and was originally established in Acquired by MarketAxess in 2013, Trax is a trading name of Xtrakter Ltd. and is a wholly owned subsidiary of MarketAxess Holdings, Inc. For more information, please visit For more information on our offering please contact us: sales@traxmarkets.com +44 (0) Xtrakter Limited (the Company ). Trax is a trading name of Xtrakter Limited. The Company is a wholly owned subsidiary of MarketAxess Holdings Inc. To the fullest extent permitted by applicable law, the Company disclaims all warranties and representations contained herein. The Company does not independently verify information obtained from third party sources. Confidential and proprietary information of the Company. All forms of copying prohibited. The Company is authorised and regulated by the UK Financial Conduct Authority.