Good and bad news for transaction reporting under RTS 22

Fewer reportable fields doesn’t necessarily mean less work.  In this blog, we look at the key changes in RTS 22 from the original  MIFID II consultation proposals and provide some conclusions on the overall impact.

We carried out a detailed analysis of the reporting fields in the revised draft regulatory technical standards (RTS) released by ESMA.  RTS 22 is the section which sets out the transaction reporting obligations and reportable fields.  The analysis takes the fields in the original consultation paper and compares them to the equivalent versions of the fields in the final report.  In many cases this is a one to one mapping after accounting for some changes in the terminology used.  If you want to take a look or to use the table of fields for your own analysis we have published this as an excel document.

So what did we find? Taken at face value the number of fields have been reduced from 81 to 65 fields.  A reduction of 16 fields, which is seemingly good news.  However this apparent reduction masks an increase in the information that reporting firms will have to capture and submit – not such good news.

New fields: Our analysis shows there are 10 new fields which have been added.  The overall reduction in the number of fields results from 13 control fields (code type e.g. LEI vs national identifier) being removed.  We expect that seven of these will be included within the ISO 20022 reporting schema and therefore firms will have to continue to report them.  The remainder are no longer necessary for fields where only one code type is permitted for reporting which again will be enforced through the reporting schema.

Fully removed fields: Nine fields in total were removed.  “Postcode” and “country of residence” fields have been removed for several identifier fields as has the “consideration” field and the “option exercise” field  is no longer a reportable activity.

Compressed into another field: Three fields have been compressed into other existing fields, so in essence the information is still to be reported.  The three counterpart fields remain.

Unchanged: A total of 52 fields remain unchanged in terms of field name.  There are some wording changes embedded which will need further analysis as these will have implications for reporting.

You can also find our full analysis of the tables below which have the original data fields and revised data fields side by side so you can conduct your own analysis.

The 10 new reporting fields:

Providing these additional fields will in some cases be easy, such as field 5 stating whether you are a MiFID firm or not, whilst others will be very challenging, such as field 40 “complex trade ID” and “instrument full name”.  This latter field is likely to be supported by further guidance given it will be used to identify all derivatives which are not allocated an ISIN code.