MiFID Transaction Reporting | Troubleshooting
12 May 2021
According the FCA, nearly 60pct of rejected transactions are due to the instrument not being found in their database.
MiFID firms submitting transaction reports will be familiar with the CON-412 rejection code – the error code assigned by ESMA, the originators of the MiFID body of regulations. The CON-412 error states: “Instrument is not valid in reference data on transaction date” and is well-known amongst regulatory operational specialists monitoring transaction reports.
Even though firms have had three years to bed-in processes, the CON-412 rejection code continues to plague operations and compliance departments. In 2018, at the start of MiFID, over 37pct of rejections were due to this error. In 2019, this skyrocketed to nearly 70pct of rejected transactions being assigned this error only to drop back down to over 57pct in 2020.
How do firms avoid or resolve this issue? The first port of call would be to conduct due diligence in ensuring the transaction is reportable and residing in the FCA or EMSA databases.
A free tool by Qomply can help. The cloud-based tool retrieves instrument data across all UK and EU exchanges and trading venues and instantly shows if an instrument is reportable on a specific date. If the instrument is not reportable, and there are no underlying instruments, then the transaction should not be submitted to the regulator as it would be considered “over reporting”.
Free MiFID Reportability Tool https://qti.qomplypi.com/firdslookup
Access the Tool
Enter ISIN to Check Across UK and EU Databases
In our test, we use ISIN GB00BDFGHW41
Click View Results
The Trading Venues on which this instrument was tradable for today’s date are shown.
To determine if a particular instrument was considered reportable on a trade date, enter the ISIN and the Trade Date in Step 2 on the screen. If a date is not entered, the system will retrieve data for today.
The results show whether the instrument is Reportable in the UK and/or Reportable in the EU along side the Trading Venue on which it was active. If you are reporting to a UK regulator then you are only interested in whether the instrument was reportable in the UK. Therefore, if TRUE appears in the “Reportable in UK” column, the instrument is reportable.
Additional details such as the Trading Venue, to which the instrument was admitted, also appears. For firms who traded the instrument on a trading venue this is useful. If you traded the instrument on a trading venue and it is not listed in the results, then contact the trading venue to ensure they submitted the reference data to FIRDS – an obligation they have under the RTS23 regulation.
If an instrument is traded XOFF, then the instrument should be reportable on at least one trading venue in the region.
If an instrument is traded XXXX, then the instrument should not have been admitted to trading in the region. That is, using the example above, in column “ Reportable in the UK” we should not see TRUE in any of the rows.
Get Results for a Specific Trade Date
This feature is especially useful when troubleshooting historic transaction reports.
To go back in time to a specific trade date to determine reportability on that date, enter the ISIN, enter a trade date, and click VIEW RESULTS.
Get Results for Multiple ISINs
To conduct efficient searches across multiple ISINS for the same trade date, simply enter a series of ISINS separated by a comma. Enter the trade date and click VIEW RESULTS.
Get Results for Multiple ISINs in a CSV file
From page https://qti.qomplypi.com/firdslookup, select the CSV file from your local machine, enter a trade date and click VIEW RESULTS.
Instead of viewing the results on the screen, it may be more helpful to download the results to a CSV file. This is especially true when entering more than one ISIN. Run the search as normal however instead of clicking VIEW RESULTS, click DOWNLOAD RESULTS.
Qomply is a leading RegTech firm that has redefined how investment firms meet complex MiFID II regulatory requirements at disruptive prices.
Qomply's cloud-based ReportAssure Suite performs accuracy and completeness checks providing assurance that transaction reporting systems are working correctly. Firms conduct periodic comprehensive checks on their transaction reports - both before and after submission to the regulator – putting them firmly in control.
For more information, please contact Qomply on +44 (0)20 8242 4789 or firstname.lastname@example.org.
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