The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

FESE’s Berthoud Elaborates on the MMT Initiative for Trade Flag Standardisation

Marc Berthoud, vice chairman of the Federation of European Securities Exchanges’ (FESE) Economics and Statistics Committee and deputy head of data and index products SIX Swiss Exchange, explained the details of the exchange association’s recent initiative in the market data space: the Market Model Typology (MMT), to delegates at last week’s FIMA conference in London. Berthoud indicated that the group is focused on developing standards for trade flags for trade condition reporting across all markets and OTC (see the FESE website for more here).

He noted that the FESE led initiative involves participants that contribute around 90% of all of the equity trading flow across Europe and is open to all comers, be they vendors, exchanges or market participants. The standard data model has been based on recommendations made last year by the predecessor to the European Securities and Markets Authority (ESMA): a technical working group of the Committee of European Securities Regulators (CESR). Essentially it is a data model and cross reference table that maps trade flags across exchanges, multilateral trading facilities (MTFs) and OTC reporting venues.

“The scope of the project includes developing a cross reference for immediate adoption and use in vendor provided services in parallel with native adoption, which is to be achieved by gaining industry involvement,” explained Berthoud. Industry input and guidance will be particularly important for the application of these new standards to the OTC space in future, but for now, the data vendor and market operator communities are the driving force.

The development of a European consolidated tape(s) as part of the next iteration of MiFID is another important factor to consider in all of this work, as it will compel further standardisation of the market data space . The MMT steering group and technical committee are hoping that regulatory change can be used to their advantage in getting the standards adopted across Europe and beyond by achieving regulatory endorsement of the MMT standards.

However, Berthoud indicated that the standards will not initially aim to replace the trade flag practices that are currently used within individual markets and there will be no mandate for change. The MMT group is also not seeking to push the European Commission down any particular route with regards to data consolidation, he explained.

As for where the initiative is at this stage, Berthoud said that the proof of concept work has been done, protocol mapping has been completed and a first iteration of what it calls the “MMT cookbook” will soon be published for comment. “We are also looking to put in place a strong governance model for the standards initiative by next year, as well as achieving regulatory endorsement,” he told delegates. “To make sure the process is as open as possible, we have published details about how we have come to the current standards on the FESE website.”

Initially, the focus is expanding the consultation process to the FIX Protocol trade standards working group to get feedback on the progress thus far, but Berthoud indicated that the group is happy to receive feedback from other standards bodies such as ISO.

For now, the full list of initial participants in the MMT work is: Bloomberg, BME Spanish exchanges, Chi-X Europe, Deutsche Börse, the FESE secretariat, Fidessa, the Irish Stock Exchange, London Stock Exchange Group, Markit BOAT, Nasdaq OMX, NYSE Euronext, SIX Swiss Exchange, Thomson Reuters and Wiener Börse.

Related content

WEBINAR

Recorded Webinar: Entity identification and client lifecycle management – How financial institutions can drive $4 billion in cost savings

A new model in Legal Entity Identifier (LEI) issuance has created significant opportunities for financial institutions to capitalise on their KYC and AML due diligence. By becoming Validation Agents and obtaining LEIs on behalf of their clients, financial institutions can enhance their client onboarding experience, streamline their internal operations, and open the door to new,...

BLOG

Solidatus Moves into 2021 with Expansion Plans Backed by Investment from Citi

Solidatus, provider of a data management platform that allows businesses to rapidly map and visualise their data landscape, grew from strength to strength in 2020, and is on the cusp of further strategic development as it heads into 2021 with plans to accelerate growth, expand into the US and Asia Pacific, and release next-generation data...

EVENT

Data Management Summit Virtual

The Data Management Summit Virtual will bring together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Join us online to hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

Regulatory Data Handbook 2020/2021 – Eighth Edition

This eighth edition of A-Team Group’s Regulatory Data Handbook is a ‘must-have’ for capital markets participants during this period of unprecedented change. Available free of charge, it profiles every regulation that impacts capital markets data management practices giving you: A detailed overview of each regulation with key dates, data and data management implications, links to...