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

JWG Takes MiFID Impact on Reference Data to High Granularity

Subscribe to our newsletter

The MiFID Joint Working Group has taken the bull by the horns with respect to entity identifiers and their role in the forthcoming EU Markets in Financial Instruments Directive, much hullabaloo about which continues to bubble in the London marketplace if nowhere else.

The latest JWG white paper – described on Page 4 and available from the www.mifid.com web-site – attempts to set the market a-chattering with its discussion on how it expects MiFID to impact the reference data marketplace. It also makes a whole host of proposals that actually make the reference data obligations posed by MiFID appear, well, almost under control.

But recommendations are what they are, no more, no less. And it’s going to take some big decisions by key market practitioners to make these proposals a reality that can cater to the wide-ranging requirements of the MiFID regulations. The JWG itself acknowledges as much. It outlines the diverging opinions about just which set of unique identifiers should be adopted by the marketplace to meet their MiFID obligations.

Indeed, minutes of the latest meeting on January 17 of the JWG’s Reference Data Subject Group detail a “heated open discussion” over whether systematic internalizers are likely to warrant identification as MICs (ISO 10383) or not.

The arguments went thus:

“(The) Argument ‘for’ allocating MICs to cover Systematic Internalizers (SIs) centres around the removal of uncertainty by assigning such an identifier. A MIC code (ISO 10383) is an extant market identifier, assigned to business entities operating regulated markets plus most entities likely to be classified as Multilateral Trading Facilities (MTFs). Another identifier might be a BIC code. Swift raised a comment as to why BICs (or MICs) cannot be a long-term solution for the identification of Systematic Internalizers, particularly as most (if not all SIs) are likely to be institutions with BICs already assigned. A broker-dealer running an MTF would be assigned a MIC; a broker-dealer internalising a trade would be identified by its BIC.”

And:

“(The) Argument ‘against’ allocating a MIC arises from the fact that a SI does not actually operate a regulated market. An SI is a role (one of many roles that an investment firm might play). The industry must be mindful not to overload the identifiers semantically, especially if there is a need to identify Places of Quote (POQs) post-MiFID. In response, the counter-suggestion is the SIs be awarded an IBEI while regulated markets and MTFs continue to be assigned MICs. There is also the potential for serious symbo-logy confusion if SIs are identified by BICs/MICs, and also IBEIs over time!”

The characterization of these discussions as “heated” may, in fact, be an understatement. Certainly, as A-Team Group editorial types ready themselves for the launch of our very own MiFID Monitor newsletter next month, this for and against the use of MICs to cover SIs was raised on several occasions, and will be the subject of further discussion in our inaugural February issue. Sign up for a launch alert at www.mifidmonitor.com. That said, the exchange at the meeting may demonstrate that the granularity of discussion of this particular point may be far deeper than many other MiFID-related topics, so perhaps the industry should be giving itself a pat on the back for once.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: How to organise, integrate and structure data for successful AI

Artificial intelligence (AI) is increasingly being rolled out across financial institutions, being put to work in applications that are transforming everything from back-office data management to front-office trading platforms. The potential for AI to bring further cost-savings and operational gains are limited only by the imaginations of individual organisations. What they all require to achieve...

BLOG

Making the Most of Mainframe Structured Data: Webinar Preview

Mainframes still provide the data and computational backbone of many financial institutions but some organisations are encountering challenges as they try to integrate them with newer architectures. Many are incompatible with cloud and server-based architectures as well as APIs. Work-arounds can be achieved but they require middleware that can be costly and time consuming to...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

The DORA Implementation Playbook: A Practitioner’s Guide to Demonstrating Resilience Beyond the Deadline

The Digital Operational Resilience Act (DORA) has fundamentally reshaped the European Union’s financial regulatory landscape, with its full application beginning on January 17, 2025. This regulation goes beyond traditional risk management, explicitly acknowledging that digital incidents can threaten the stability of the entire financial system. As the deadline has passed, the focus is now shifting...