On 30 March 2021, the European Securities and Markets Authority (ESMA) published a final report on the review of transaction and reference data reporting obligations under MiFIR.

The final report is prepared in accordance with Article 26(10) of MiFIR that requires ESMA to submit a report to the European Commission assessing the functioning of the transaction reporting regime under Article 26 of MiFIR.

Scope of the transaction reporting and reference data obligations

Sections 4 and 5 of the final report cover the scope of the transaction reporting and reference data obligations both in terms of entities subject to the transaction reporting obligation and in terms of instruments to be reported under both obligations. In particular, section 4.1 of the final report includes a recommendation to extend the scope of reporting requirements under Article 26 of MiFIR to UCITS and alternative investment fund management firms when they provide at least one MIFID service to third parties. With respect to the scope of financial instruments to be reported, section 5.2 includes proposals for simplification of the trading on a trading venue (ToTV) concept 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 section 5.3 includes proposals to further align the transaction reporting obligation with the Benchmark Regulation.

Specific data elements

Sections 6, 7, 8 and 9 of the final report 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. In particular, section 8.2 of the final report recommends simplifying reporting with the removal of the short sale indicator.

Also, in sections 6, 7 and 9 ESMA sets out proposals for four additional elements to be included in the set of details to be reported in order to maximise the usage of transaction reporting data. This includes information on client categories and buyback programs as well as a specific empowerment to ESMA to specify the conditions for linking specific transactions and for identifying aggregated orders resulting in the execution of a transaction.

Interaction with EMIR and LEI

Section 12 covers the interaction with reporting obligations under EMIR and ESMA sets out proposals to ensure further alignment between the two reporting regimes. Section 13 covers the use of the LEI of the issuer of the financial instruments for reference data reporting purposes and includes proposals to enhance the effectiveness of such obligation.

Next steps

The final report has been submitted to the Commission. It is expected to feed into any review of the MiFIR transaction reporting regime.