As promised by Mark Husler, head of information services business development at the London Stock Exchange (LSE), back in May, the exchange operator has extended its transaction reporting service beyond its traditional UK remit into the Netherlands. The LSE has therefore received approval from the Dutch regulator, the Autoriteit Financiële Markten (AFM), to act as an approved reporting mechanism (ARM) in the country and offer the wider reference data checking services as part of the UnaVista platform.
The Netherlands is merely the first country on the LSE’s list, as the exchange operator is keen to extend further into Europe and possibly North America and Asia in the future with the transaction reporting service, according to Husler. However, LSE is taking things one step at a time and at the moment is only currently seeking transaction reporting approval from regulators across Europe, as per client requests. The aim is to replace the need for firms trading in multiple markets to build and maintain separate reporting systems for each regulator.
LSE has been consulting its user firms to understand what their requirements are and those of the regulators around Europe for providing such a service. Husler believes that because the LSE offers a web-based hosted solution that does not require any software or hardware to be deployed at the client’s site, it would be easier to offer a global solution than installation-based services.
For now, firms currently reporting to both the UK and Dutch regulators will now be able to use UnaVista as a single point of reporting. “Each European regulator has slightly different requirements, which can make it difficult for companies to know how to report transactions correctly. UnaVista will make life easier for firms by becoming a one-stop shop for their pan-European reporting, and replacing the need for firms to maintain separate interfaces. This will enable clients make significant efficiency savings and reduce the risk of being fined for incorrect reporting,” says Husler.
The reference data angle of the service is that firms are able to upload their data to UnaVista in all common formats, which the system then validates, convert into the relevant format and submits the relevant report to the regulator. The differentiator being that the platform uses additional validation above and beyond the regulatory requirements to ensure that firms are reporting correctly. Reference data such as Committee of European Securities Regulators’ (CESR), list of regulated markets and MiFID’s list of eligible securities are used to certify submitted data and highlight potential errors.
“Reference data validation is therefore offered as a value added service to customers so that clients can check that they are in compliance and not liable for potentially substantial fines from regulators. The service also checks that the securities that are being reported to the regulator are MiFID eligible securities and MiFID eligible markets – it reconciles the clients’ transaction reports against the list of eligible securities. This helps firms to monitor potential under-reporting or over-reporting to the regulator,” says Husler.