On 24 September 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper reviewing the reference data and transaction reporting obligations under the Markets in Financial Instruments Regulation (MiFIR).

The consultation paper covers the report to be delivered to the European Commission under Article 26(10) MiFIR which provides that:

ESMA shall submit a report to the Commission on the functioning of this Article, including its interaction with the related reporting obligations under Regulation (EU) No 648/2012, and whether the content and format of transaction reports received and exchanged between competent authorities comprehensively enables monitoring of the activities of investment firms in accordance with Article 24 of this Regulation. The Commission may take steps to propose any changes, including providing for transactions to be transmitted only to a single system appointed by ESMA instead of to competent authorities. The Commission shall forward ESMA’s report to the European Parliament and to the Council.

The deadline for delivering the report is set out in Article 26(10) MiFIR (3 January 2019) but this was modified, in agreement with the Commission, in the context of Brexit and the COVID-19 pandemic.

The consultation paper is set out as follows:

  • After the executive summary and introduction (sections 1 and 2), sections 3 and 4 cover the scope of the transaction reporting and reference data obligations. In particular, sections 4.1 and 4.2 include proposals for a possible extension of the scope of reporting in light of the considerations made in the ESMA final report on the transparency regime for non-equity instruments and the trading obligation for derivatives and the Benchmark Regulation.
  • Sections 5, 6, 7, and 8 cover the specific data elements that should be reported under the transaction reporting obligation that are explicitly mentioned in the level 1 provision under Article 26(3) of MiFIR. ESMA has assessed each of these data elements and for each of them has included proposals as to whether the data element should be maintained, removed, replaced or further clarified. ESMA also sets out four additional elements to be included in the set of details to be reported.
  • Sections 9 and 10 cover the order transmission regime and the delegation of the reporting obligation to authorised reporting mechanisms.
  • Section 11 covers the interaction with reporting obligations under the European Market Infrastructure Regulation and includes proposals to ensure further alignment between the two reporting regimes.
  • Section 12 covers the use of the legal entity identifier of the issuer of the financial instruments for reference data reporting purposes and includes proposals to enhance the effectiveness of such obligation.

The deadline for comments on the consultation paper is 20 November 2020. ESMA intends to submit its final report to the European Commission in Q1 2021.