While MiFID focused principally on European equity markets, MiFID II has a much broader remit. It has had repercussions across OTC and exchange traded derivatives, fixed income securities and structured products, as well as commodities markets. With the complexity of compliance and cost of non-compliance both on the rise, Xenomorph can handle the data management challenges. It integrates all required sources of data, runs validation processes to ensure accuracy of those sources and enables firms to submit validated reports to regulators within specified timeframes.
What are the Data Management Requirements of MiFID II?
From a data management perspective, MiFID II obligations covering transaction reporting (to regulators for market surveillance) and transparency (publishing pre- and post-trade data to the market) can both prove burdensome. Best execution requirements can also present challenges to data management infrastructure, while the emergence of new venues and publication arrangements mean more data sources to integrate into existing workflows.
Under MiFID II / MiFIR, firms face a significant increase in the complexity (more than treble the number of fields to report) and scope (more asset classes in scope) of the transaction reporting regime. Further compounding this challenge has been the rising cost of non-compliance, placing greater emphasis on firms to deploy data management systems and processes to ensure accurate reporting.
Transparency and Data Integration
Updated transparency obligations in MiFID II span a much greater universe of instruments, including fixed income securities, and in some cases threaten to impact market structure. On the flip-side of this increased transparency is the need to integrate data from a growing number of sources. As new approved reporting mechanisms (APAs) and Organized Trading Facilities (OTFs) compete with incumbents, the ability to integrate, cleanse and analyse data from a greater number of sources becomes heightened.
Best Execution in MiFID II
Evolving best execution obligations in MiFID II apply across a broader range of instruments and involve more transparency with regards to execution policies. At its heart, best execution is really a data management challenge, requiring firms to analyse and benchmark the quality of trade execution against available market data.
Xenomorph MiFID II Data Management Solution
The Xenomorph data management platform can easily be configured to solve new use cases – whether driven by business or regulatory demands such as those presented by MiFID II. As the regulatory landscape evolves, Xenomorph enables firms to tailor their workflows to meet those obligations.
Xenomorph covers all asset classes. It supports a complete range of vendor feeds. It integrates with different business intelligence tools, pricing and risk engines, programming languages and applications. It supports complex objects, data types and analytics, and it supports complex workflows – with adaptive validation rules and exception handling processes that can be prioritized based on factors most important to your business.