MIFID II – TRANSACTION REPORTING

On 3 January 2018, MiFID II increased the quantity of data we need to report, the scope of transactions that are reportable and introduced reporting restrictions for the first time.

Affected transactions

Rather than reporting just buys and sales post trade, the new reporting rules stipulate that we must also report:

• Off market transactions;
• Some primary market transactions; and
• Asset transfers where there is a change in ownership or beneficiary, say from an individual to a joint Portfolio, or from a settlor to a trust Portfolio.

Affected assets

The asset types we need to report include company shares, exchange traded funds, closed-ended investment companies, investment trusts, VCTs and bonds executed on a trading venue. Structured products are also caught; based on the underlying asset being an instrument traded on a trading venue. In practice unit trusts and OEICs are unlikely to be included unless traded on a trading venue.

In summary the rules mean we need to hold more client data; the number of data fields we need to hold increased from 29 to 65.

There are also wider implications for each of the groups below.

This page is designed to help you understand the implications of Transaction Reporting and what you need to do, depending upon your permissions, and the types of clients you have.

As an adviser you need to consider your clients’ position regarding these rules to ensure you meet the requirements.

This Transaction Reporting Technical Guide provides more detailed, but essential, information which we will update periodically.

Natural Persons

In summary we must have full names, date of birth, multiple nationalities and National Identifiers (e.g. National Insurance Number or identification code dependent on nationality) on record for clients.

Trusts, Charities and Companies

In order to trade reportable transactions trusts, charities and companies must operate using a Legal Entity Identifier (LEI). LEIs can be bought from many accredited providers and suppliers. For example, EQS charge £44 for an initial application and £61 for a renewal. For small holdings, it may be appropriate to sell down small holdings rather than incur this ongoing cost.

Pension Administrators

In most instances the pension provider, or administrator, applies for a trust portfolio for each policy, therefore, we have to report the LEI of the relevant trust. There may be an opportunity to use a single identifier for multiple portfolios, but only where set up under a single master trust.

You can use this LEI look up website to determine if a company or trust already has an LEI: https://www.lei-lookup.com

If you are a Discretionary Investment Manager or an adviser with permission to manage investments

We have created two solutions where we can either report on your behalf under a free transmission service, our preferred approach, or we can make data available so that you can report.

This Transaction Reporting DIM Guide and the Terms and Conditions to the Transmission Agreement provide the detail you need to consider before deciding on the approach most appropriate for you.

You then need to complete the form below:

• A006 form  – required for DIMs and advisers with permission to manage investments. This form is used to capture your LEI and information about your decision makers. Where appropriate, it acts as your acceptance of our Transmission Agreement.

The information contained on this webpage is for use by financial advisers only. Unless stated otherwise any opinions expressed are our own and based on our interpretation of relevant rules and regulation. This webpage is for information purposes only and firms cannot rely solely on the information to ensure compliance with the rules.