About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Final ESMA Report on MiFID II and MiFIR Technical Standards Recommends XML and ISO 20022 for Regulatory Data Reporting

Subscribe to our newsletter

The European Securities and Markets Authority (ESMA) has published its final report on Regulatory Technical Standards (RTS) for Markets in Financial Instruments II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR). The report covers many aspects of the directive and regulation, and concludes debate over market data reporting, recommending that transaction and instrument reference data should be reported under MiFIR in a common XML format in accordance with ISO 20022 methodology.

The final report on technical standards for MiFID II and MiFIR was published this week, along with final reports on technical standards for Market Abuse Regulation (MAR) and the Central Securities Depositories Regulation (CSDR). The reports have been sent to the European Commission, which has three months to approve them ahead of MAR entering into force in 2016 and MiFID II and MiFIR in 2017. CSDR entered into force back in 2014.

The final report on MiFID II and MiFIR, includes rules that will bring the majority of non-equity products into a robust regulatory regime and move a significant part of over the counter trading onto regulated platforms. Key rules aim to introduce fairer, safer and more efficient markets, greater transparency and stronger investor protection through improved disclosure.

The regulatory reporting requirement has been the subject of great debate over past months, with respondents to the latest ESMA public consultation considering the implementation challenges of formats including FpML, ISO 20022, TREM (a custom XML format defined by ESMA and used for transaction reporting and instrument reference data exchange between competent authorities), IFX, FIX and XBRL.

The formats perceived by respondents to be least challenging and preferred are ISO 20022 and FpML. A study by ESMA to assess which format is best for transaction and reference data reporting concluded that ISO 20022 is most suitable, leading ESMA to state in the report: “Having considered the feedback to the consultation paper, as well as results of the study, ESMA has decided that transactions and instrument reference data should be reported under MiFIR in a common XML format and in accordance with ISO 20022 methodology.”

ISO 20022 is the ISO-approved standardisation methodology for financial messages and data sets. It is syntax-independent, but includes a set of XML design rules to convert message models into XML schemas whenever the use of the ISO 20022 XML-based syntax is preferred. The ISO standard has also been selected for post-trade transparency reports, aligning these with the format used for reference data, but in this case concerning only the way information is represented, for example the same codes are used to represent the same value, and not how data is collected or published.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: ESG: A Growth Opportunity and a Regulatory Challenge

ESG investing, regulation and compliance are central concerns for financial institutions, although not all jurisdictions are equal. In the US, ESG has become a partisan issue making SEC regulation uncertain; the EU is on good form and has already implemented multiple regulations; and Asia Pacific is advancing as regulators and exchanges deploy ESG rules. Greenwashing...

BLOG

MCO Acquires Fairwords E-Comms Surveillance Platform

Conduct risk and compliance technology provider MyComplianceOffice Inc. (MCO) has acquired Fairwords, developer of AI-powered electronic communications software that captures digital communications while proactively enforcing policy. Terms of the transaction weren’t disclosed. Fairwords’ communications compliance software provides proactive training, analytics, and archiving to mitigate communications risks and prevent compliance crises and lawsuits. Using the system,...

EVENT

ESG Data & Tech Summit London

The ESG Data & Tech Summit will explore challenges around assembling and evaluating ESG data for reporting and the impact of regulatory measures and industry collaboration on transparency and standardisation efforts. Expert speakers will address how the evolving market infrastructure is developing and the role of new technologies and alternative data in improving insight and filling data gaps.

GUIDE

ESG Handbook 2023

The ESG Handbook 2023 edition is the essential guide to everything you need to know about ESG and how to manage requirements if you work in financial data and technology. Download your free copy to understand: What ESG Covers: The scope and definition of ESG Regulations: The evolution of global regulations, especially in the UK...