One year to go: RTS 2 non-equities reporting to reduce to five minutes

The effects of Brexit on MiFID II post-trade transparency reporting

The countdown has now started! From this month it is now less than a year to go until investment firms’ RTS 2 non-equities post-trade transparency reporting needs to reduce from 15 minutes to five minutes. This new implementation comes in three years after the original MiFID II go-live.

RTS 2, Article 7 states: “…for the first three years of application of Regulation No 600/2014, within 15 minutes after the execution of the relevant transaction; thereafter, within 5 minutes after the execution of the relevant transaction.”

Whereas RTS 1 transparency has been relatively straightforward due to the electronic nature of equities trading (hence the one minute limit), the non-automated nature of voice trading, as an example, still causes problems for firms in terms of meeting the current close-to-real-time 15-minute deadline imposed by the regulation. It is commonly recognised that firms still struggle to meet publication after 15 minutes, whether that’s changing a trader’s habit, automating trading or even introducing FIX messaging protocol which  – believe it or not  – still isn’t used by all firms. So the reduction to five minutes may really impact firms and may alert the national competent authorities to focus more on these transparency deadlines.

MiFID II’s transparency objective meant that it was bringing the non-equities trading world into the 21st century and electronifying the practice, creating a level playing field and enabling investors to make an informed decision with the knowledge of how the price was formed.

With under a year to go, firms need to incorporate this change into their book of work technologically, procedurally and in some cases, culturally. At Kaizen, we provide accuracy testing on MiFID II post-trade transparency reporting (PTT) data to check that you are meeting these close-to-real-time requirements and that your data is correct. This includes checking whether you are reporting within the required timescales and alerting firms where they consistently do not meet the deadline after execution. 

Contact us if you’d like some help in ensuring your PTT reporting is accurate as this will help with your preparation for the change to reporting within five minutes.