08 Apr 2021

Eurex

MiFID II/MiFIR: Requirements regarding flagging of orders according to MiFID II/MiFIR, introduction of report TR166

Eurex Circular 035/21 MiFID II/MiFIR: Requirements regarding flagging of orders according to MiFID II/MiFIR, introduction of report TR166


1.  Introduction

Starting 3 May 2021, Eurex Deutschland will offer to all Participants a new report „TR166 Identifier Mapping Final Error Report”, which shows the final number of non-decrypted short/long code combinations. This report will be provided for the Participants of Eurex Deutschland in addition to the existing short code reports TR160 and TR161. Report TR166 will also be used in future as the basis for sanctions measures. 

Introduction in simulation: 12 April 2021
Introduction in production: 3 May 2021

2.  Action required

We would therefore like to draw your attention once again to the obligation of Trading Participants to provide the data to be supplied in accordance with Directive 2014/65/EU of the European Parliament and of the Council and the Delegated Regulation (EU) 600/2014 (see Eurex Circular 040/17, 1.4 Short codes).

Please note that a breach of this obligation may be punished by the Sanctions Committee of Eurex Deutschland.

3.  Details

Report TR166

The new report "TR166 Identifier Mapping Final Error Report" will be made available on a daily basis to Trading Participants from 12 April 2021 in simulation and from 3 May 2021 in production.

The report contains the non-decrypted short codes of a trading day "T" after the period "T+1". It also contains the number of all used short codes in addition to the number of non-decrypted short codes of trading day "T" as well as their percentage shares. The report is designed to support Trading Participants in determining the final error rates of their data deliveries for trading day "T" after the "T+1" deadline.

Legal basis

Since 3 January 2018, all Trading Participants have been required to identify the algorithm they are using in connection with their participation in exchange trading, the execution decision maker, the investment decision maker and the client (Article 48 (10) of Directive 2014/65/EU of the European Parliament and of the Council and Article 25 (1) of Delegated Regulation (EU) 600/2014). 

Eurex, as operator of a trading venue, is obligated to record and keep at the disposal of the competent authority, for at least five years, the relevant data relating to all orders in financial instruments which are advertised through its systems (Article 25 (2) of Delegated Regulation (EU) 600/2014). Data about to such orders, that are to be kept available in accordance with this regulation, are further detailed in Delegated Regulation 2017/580.

These legal requirements were incorporated in the Exchange Rules of Eurex Deutschland (§§ 17a, 63 and 72). We would like to point out expressly that violations against these reporting requirements will be handed to the Sanctions Committee of Eurex Deutschland in future.

Please find all flagging options and scenarios in the document “Information handbook for audit trail, transaction and other regulatory reporting under the MiFID II/MiFIR regime” on the Eurex website www.eurex.com under the following link:

Rules & Regs > MiFID II/MiFIR > Client & Member Reference Data > Reporting Manual - MiFID II/MiFIR

The fields “execution decision”, “investment decision” and “clientID” in the orders are to be filled using the “short code” solution. Please note that algorithms do not need to be encrypted using short codes due to their numerical format. Only natural persons and Legal Entity Identifiers (LEIs) need encryption using the short code solution. The investment decision and execution decision identifiers are to be set to either “Algorithm” or “Natural person”.

Trading Participants are obliged to upload the corresponding explanatory long codes to their short codes in the Eurex upload functionalities (SFTP or Member Section) latest on the next trading day (T+1). Algorithm certificates need to be provided to Eurex Deutschland prior to the usage of algorithms via the Eurex upload functionalities (SFTP or Member Section).
 

Further information

Recipients:

All Trading Participants of Eurex Deutschland 

Target groups:

Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination, Compliance departments, Nominated Persons

Related circular:

Eurex circular 040/17

Contact:

For inquiries regarding functionality: client.services@eurex.com, 
for regulatory inquiries: eurex.reg.reporting@eurex.com

Web:

www.eurex.com > Rules & Regs > MiFID II/MiFIR

Authorised by:

Randolf Roth


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