We are now several years on from the launch of the MiFID II regime. Since Jan 2018 MiFID firms (and former MiFID firms in the United Kingdom) have had a swathe of continuing reporting obligations which are required of firms engaging in the business of finance.

The concept of “ToTV” or “Traded on a Trading Venue” which is relevant for a number of provisions under MiFID II such as Transaction Reporting and Trade Reporting (transparency) eligibility is something many firms have had difficulty pinning down – not least because the regulators, whilst keen to reference ToTV themselves as triggering the obligations, have been somewhat vague in defining exactly what it is in the legal texts of the directive and regulation necessitating a slew of guidance and follow up revised guidance on the subject. Firms have spent millions trying to determine what is and what is not ToTV (and hence, reportable or not reportable). In the UK alone, in 2019 two large and respected firms with substantial compliance and IT budgets were fined tens of millions for failing to solve this problem – 14 years after the original drafting of the 2004 MiFID showing that both time and money were not sufficient.

Most firms likely outsource (or so they think) this problem to an ARM or APA. Using an ARM or an APA still requires that the firm itself take reasonable steps to verify the completeness, accuracy and timelines of reports made on their behalf. So the question still remains…

How can the firm, which is ultimately responsible, ensure they are reporting all that they should be reporting and not reporting that which they should not? How can a firm sanity check report eligibility before and after they’re submitted? How can a firm demonstrate they are in control of their reporting processes when the regulator comes knocking? Where reporting through another entity such as an ARM, how can a firm show they have taken steps to ensure reports generated on their behalf meet their obligations?