Industry experts have agreed the likelihood of firms perfectly reporting as required under MiFID II is highly unlikely by 2018.
Delegates at The Trade’s MiFID II event in Frankfurt on 10 May discussed the issue and agreed reporting requirements have brought about ‘unintended consequences’.
Heinz Martin Sorge, product development at Deutsche Boerse’s regulatory reporting hub, told the panel: “MiFID II was delayed due to the trouble ESMA has in setting up a database for reference reporting. The entire market has to report data.”
Sorge added despite the systematic improvement MiFID II will bring to the market, unintended consequences have arisen which regulators are not on top of.
He said: “It’s not so improbable more problems will arise and there will be years of data being created but not analysed or used.
“There will not be perfect reporting under MiFID by 2018.“
Mark Kelly, director at Abide Financial, said some firms are unaware of what exactly they need to report, with many requirements not effecting them.
Kelly added that exchanges have the most difficult task in reporting of all market participants: “Exchanges have the most difficult task of everyone in the market.
“They have to report from their perspective, go to market participants around the world and obtain sensitive data on their traders. It’s a recipe for driving business away.”
Deutsche Boerse’s Sorge explained the challenges lie in the ‘completeness’ and ‘comprehensiveness’ of the data being reported.
He said: “Transaction reporting provision of reference data is a problem, and the other side is dealing with sensitive customer data. We need to think of new models for transaction reporting.”