Transaction Reporting How-to Guide: Personal Identifiers

Transaction Reporting How-to Guide: Personal Identifiers blog image

The FCA recently released Market Watch 70 providing a reminder to firms of the importance it attaches to the transaction reports it receives.  Transaction reports are used to help them detect and investigate cases of market abuse, combat financial crime, support conduct supervision and examine market events.  For the regulator to be able to do that efficiently, reported data must be complete, accurate and sent on time.

Despite MiFIR heading for its 5th birthday in January 2023, Kaizen’s testing is still finding a high number of personal identifier errors within transaction reporting, something also highlighted in Market Watch 70:

  • Buyer/Seller identifiers
  • Buyer/Seller decision maker identifiers
  • Investment decision within firm
  • Execution within firm

These codes are essential to regulators for their work in detecting market abuse.  Harmonisation of the population of this field is vital for regulators attempting to identify individuals insider dealing through several trading accounts held at a number of different firms.  Regulators can only attempt to detect such activity if all the firms use the same and correct code to identify these unscrupulous types. 

Personal Identifier Essentials

The first thing to remember is that all personal identifiers start with the ISO two character country code of the individual’s nationality (e.g. ‘GB’, ‘US’, ‘FR’ etc.) followed by the national identifier relevant to that country.  Kosovo being the one outsider here in that it doesn’t have an official ISO-3166 code but its unofficial “XK” is now being recognised by competent authorities.

National identifier taxonomies

A list of the national identifier taxonomies can be found in the RTS 22 Annex.  For some countries, there is a single taxonomy; for example, for German nationals, only the ‘CONCAT’ can be used. For other countries, there are up to three taxonomies.

In all cases you can only use the ’Priority 2’ taxonomy if the ‘Priority 1’ taxonomy is not applicable to that individual.  For example, the ‘Priority 1’ taxonomy for UK individuals is the National Insurance Number (NINO) and priority 2 is ‘CONCAT’.  So if you are identifying a British person, you should only use a ‘CONCAT’ if that person does not have a National Insurance Number.  In theory every British person over the age of 16 is issued with a National Insurance number so for the purposes of transaction reporting you should not be identifying any British person over the age of 16 with a CONCAT code.

What is ‘CONCAT’?

‘CONCAT’ is the concatenation of the following four elements:

  • 2 character ISO country code (as for all personal identifiers)
  • Birth date – in the format YYYYMMDD
  • First five characters of first name (right pad with hashes if less than 5 characters)
  • First five characters of surname (removing prefixes and right pad with hashes)

Further rules:

  • For the name elements, there is a conversion/removal of diacritic characters, apostrophes, hyphens, spaces etc using the transliteration table in ESMA’s Guidelines
  • Prefixes to surnames must be removed unless they are ‘attached’
    e.g. ‘Von der Leyen’ is ‘LEYEN’; McNeil is ‘MCNEI’ (rather than ‘NEIL#’)
  • The individual’s full name should form the basis of the CONCAT – incorrect abbreviations or nicknames must not be used (e.g. ‘JAMES’ rather than ‘JIM##’)
  • Titles (e.g. ‘Prof’, ‘Dame’ etc) should be removed
  • All UPPER CASE

So, for example, the CONCAT code for that well known French chanteur Jacques Dutronc, born 28 April 1943, would be: FR19430428JACQUDUTRO.

What about joint nationalities?

  • If both countries are within the EEA, use the country code of the first nationality when sorted alphabetically by its ISO 3166-1 alpha-2 code
  • If one country is within the EEA and one outside, use the EEA code
  • If both countries are outside the EEA, use the country whose ISO 3166 code is first when sorted alphabetically

So if it’s joint German and French – use the German taxonomy as ‘DE’ comes before ‘FR’.

For joint Swiss and French – use French taxonomy even though ‘CH’ comes before ‘FR’ (as Switzerland is outside the EEA).

Post Brexit reporting to an EU NCA

So post-Brexit, for the purposes of reporting to an NCA based in the EU, the UK is now outside of the EEA which impacts two things: 

  • Joint nationalities, see above
  • And, as the UK now falls into the category of “All Other Countries”, according to RTS 22 Annex II, UK individuals can no longer be identified using their National Insurance number, the passport number becomes the 1st priority identifier and CONCAT the 2nd priority identifier.

One final pitfall – the code type

Because these are XML fields, you need to identify the ‘code type’.  This might vary from ARM to ARM, but the standard code types are as follows:

‘CCPT’       – if you’re using the passport

‘CONCAT’   – if it is a CONCAT code

‘NIDN’    – for any other national identifier

Where to go to for help

If you are unsure about any of the reporting standards or just need a refresher, join our upcoming MiFIR core training course which will help ensure you are interpreting the MiFIR transaction reporting requirements correctly.

Our ReportShield™ Accuracy Testing identifies all transaction reporting errors including those related to personal identifiers, providing a regular health check of all your reported data. 

  • To find out more or for a conversation with one of our regulatory specialists, please contact us.