Trax Report. Your Fast Track to European Regulatory Change. Comply with Confidence

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1 Trax Report Your Fast Track to European Regulatory Change Comply with Confidence

2 European Markets are Experiencing Unprecedented Change With the introduction of transaction reporting obligations under EU Markets in Financial Instruments Directive I ( MiFID I ) in 2007, the European financial markets experienced significant operational change across the last decade. Further change is forthcoming in January 2018 as the complexity of transaction reporting is expanding under MiFID II. The obligation to report will capture all market participants, including both buy- and sell-side firms, while also tripling the required reporting fields and considerably broadening the scope of instruments. Additional global regulatory reforms such as the G20 commitments and European Market Infrastructure Regulation (EMIR) are placing increased burdens on financial institutions. How can the industry cope? Trax is ready to partner with you to help meet your transaction reporting obligations today and tomorrow.

3 Responding to Regulatory Change CHALLENGE LEGAL TEXT/RTS THE TRAX SOLUTION Data Sourcing and Transformation Data required to fulfil the full transaction report will need to be sourced from multiple different and new systems. MiFIR article 26(3) Scope of reportable fields RTS 22 Article 1 Data standards and formats MiFIR article 26(1) Requirement to report on T+1 OMS integration Translation tools Data normalisation Single monitoring tool across all flows and regulations Regulatory Burden and Rules Interpretation Risk The transaction reporting obligation rests with each individual firm, creating potential risks for market participants across several different regulations. MiFIR article 26(2) MiFIR eligible instruments RTS 22 Article 2 Meaning of transaction RTS 22 Article 3 Meaning of execution ESMA/2015/1909 Reporting Scenarios CP Benefit from industry level reporting rules Community based working groups Proven regulatory expertise Dedicated client on-boarding team Broad Asset Class Requirement Among the different new regulations, the scope of instruments covered increases dramatically to include non-equities and derivatives. Natural Person (NP) Data Requirements MiFIR will bring about new requirements for the inclusion of natural person data in transaction reports. General Data Protection Regulation (GDPR) will also require more stringent management of personal data. MiFIR article 26(2) MiFIR eligible instruments MiFIR article 26(3) Scope of reportable fields MiFIR article 26(4) - RTO MiFIR Article 26(6) Natural Person identifiers Extensive reference data to support MiFID I and II eligibility and validation Manage bespoke reference data within the Trax Insight user interface Data masking Storage and enrichment of NP data Data encryption Data segregation models

4 A Complete Multi-Regulation, Multi-Asset Class Solution Trax Report is a multi-regulation, multi-asset class regulatory reporting solution designed for all market participants. Investors and dealers can actively manage their regulatory obligations through Trax Insight, our fully customisable web-based system. As an Approved Reporting Mechanism (ARM) under MiFID I and having a legacy of developing advanced operational tools dating back to 1985, Trax has a deep understanding of the impact of regulatory change. Trax gives you better control of your reporting with: Translation: Extensive experience in consuming and formatting data to meet cross-asset class regulatory reporting obligations Filtering: A rules engine powered by industry leading reference data to filter your raw transaction data and route MiFIR or G20 reportable trades Enrichment: Reference data solutions to manage natural person requirements and report enrichment Validation: Intuitive exception management tools and validation to reduce regulatory risk Visibility: Quickly identify exceptions and data quality issues through the Trax Insight web-based front-end Reconciliation: Facilitates automation of a client s reconciliation processes Reference Data: Instrument Market Natural Person Legal Entity Reporting Firm Trax Report Solution Instrument Eligibility and Filtering Regulatory and Business Validation Report Enrichment Reporting to: National Competent Authorities and Trade Repositories

5 Control and Exceptions Management in One View Trax Insight is a customisable, web-based operational tool to actively manage and monitor the status of your reporting activity. Clients can quickly identify exceptions and data quality issues as well as view industry leading MIS and peer benchmarking reports. Trax Insight offers unprecedented control Management information and peer benchmarking Full trade life cycle management Maintenance of up to 5 years of reporting history Complete workflow & exception management tools Proactive exceptions notifications via Customisable dashboard providing unique intelligence into your reporting activity Easily identify the status of reported trades and review exceptions

6 Secure Management of Natural Person Data MiFIR introduces the requirement to report large amounts of sensitive natural person data, including both internal and client data. The General Data Protection Regulation (GDPR), which comes into effect in mid-2018, also adds further requirements for natural person data on the industry. The management of this data in a secure and consistent format is essential. Trax provides the necessary operational flexibility for firms to provide natural person data in two models. As a trusted partner, all transaction and natural person data is managed securely and encrypted appropriately. MODEL 1 Client provides natural person data to reporting firm MODEL 2 Reporting firm and client load natural person data into Trax directly Reporting Firm Client Reporting Firm Client Key Client NP data Internal NP data Report data Trax ARM Trax NP Data Store Trax ARM Trax NP Data Store Encrypted data NCAs NCAs Benefits Sensitive data is encrypted at all stages Reporting firm has full control over all data submitted in a report Benefits Complete segregation of NP data and reporting workflow Trax manages the mapping of this data to the report Clients can manage their own data

7 Available Now: The Pre-MiFID II Trax Transaction Reporting Solution A comprehensive service, built in close collaboration with the industry in response to complex regulatory change ARM RULES ENGINE What Trax offers: Trax has developed a MiFID II ARM rules engine to provide clients with a testing environment to validate various reporting scenarios. Benefits: Provides an early opportunity to view the impact of transaction reporting. Test technical readiness ahead of implementation deadline. INTELLIGENT DATA ENRICHMENT What Trax offers: In addition to being able to assess whether an instrument is MiFID I or MiFID II eligible, Trax can also enrich reporting fields to include instrument, legal entity, natural person and transparency data. Benefits: Minimises technical input for clients to source and generate transaction reports. MIFID II Transaction Report Client Client supplies: Trading capacity Up-front payment Short selling indicator Transaction Reference Number Trax Enrichment 22 Fields 43 Fields Trax can enrich fields, including: Buyer - first name(s) and surname(s) Instrument classification Underlying instrument code Maturity date Seller decision maker - date of birth OTC post-trade indicator Price multiplier Notional currency

8 The Trax Advantage Trax Insight gives you control over your regulatory reporting (MiFID, MiFID II, EMIR and G20 derivatives), transparency and matching activity through a single operational platform MiFID II ARM rules engine provides a testing environment for MiFID II transaction reporting Comprehensive MiFID instrument database enables firms to identify MiFID I and II eligible instruments Trax Report simplifies the challenges of the reporting requirements by managing deferrals/waivers and filtering, such as identifying reporting responsibility Extensive analytics allow firms to benchmark their performance against the industry Defined levels of service with Service Level Agreements and out of hours support About Trax Trax is a leading provider of capital market data, trade matching and regulatory reporting services to the global securities market. In 2015, Trax processed 1.1 billion transactions on behalf of its user community, including 13.3 million fixed income transactions. Trax estimates that it processes approximately 65% of all fixed income transactions in Europe as part of its post-trade service offering. Trax is based in London and was originally established in Acquired by MarketAxess in 2013, Trax is a trading name of Xtrakter Ltd. and is a wholly owned subsidiary of MarketAxess Holdings, Inc. For more information, please visit For more information on our offering please contact us: sales@traxmarkets.com +44 (0) Xtrakter Limited (the Company ). Trax is a trading name of Xtrakter Limited. The Company is a wholly owned subsidiary of MarketAxess Holdings Inc. To the fullest extent permitted by applicable law, the Company disclaims all warranties and representations contained herein. The Company does not independently verify information obtained from third party sources. Confidential and proprietary information of the Company. All forms of copying prohibited. The Company is authorised and regulated by the UK Financial Conduct Authority.