Financial Instruments in scope at High Level in Scope
Annex 1, Section C . Financial Instruments in scope
o Transferable securities;
o Money-market instruments;
o Units in collective investment undertakings;
o Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;
o Options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event);
o Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market and/or an MTF;
o Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in C.6 and not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognised clearing houses or are subject to regular margin calls;
o Derivative instruments for the transfer of credit risk;
o Financial contracts for differences.
o Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared and settled through recognised clearing houses or are subject to regular margin calls.
- Identification of organisations
The Legal Entity Identifier (LEI) is a 20-character, alpha-numeric code, to uniquely identify legally distinct entities that engage in financial transactions. LEIs are issued by "Local Operating Units" (LOUs) of the Global LEI System (there is procedure given how to achieve LSE if there is not yet obtained) , let me know if need anyone information on this . The entity entrusted with the task to coordinate and oversee a worldwide framework for the Global LEI System is the Regulatory Oversight Committee (ROC) being a group of over 60 public authorities from more than 40 countries. The ROC was established in January 2013 as a stand-alone committee after recommendations by the international Financial Stability Board (FSB) and endorsement of the ROC Charter by the Group of Twenty (G-20) nations in November 2012.
The system is intended, in particular, to allow for financial transactions' monitoring on a global, cross-border basis. In the MIFIRs, The institution of LEI Registration Agent has also been introduced. This facility enables trading venues and systematic internalisers to assist the issuer applying for the LEI to access the network of LEI issuing organizations.
- LEI under MiFID II/MiFIR in concept of Trading venues
Trading venues: Under the new regulations, any instrument considered to be “liquid” must be traded on an approved venue, which can be a regulated market (RM), multilateral trading facility (MTF), or in the case of OTC transactions, an organised trading facility (OTF).There is ongoing debate and controversy as to what exactly constitutes whether an instrument is “liquid” or “illiquid”. Under MiFIR, all liquid instruments will have to be traded on an exchange, and will also be subject to far greater pre- and post-trade transparency requirements. Whether a particular product is classified as liquid or illiquid could therefore have a big effect on market making.The issue with making this distinction across so many different instruments is one of the main reasons why the MiFID II and MiFIR implementation date has been delayed twice from its original start date of January 2015.
Note: The Executing Entity ID Code and Submitting Entity ID Code are both new fields and need to be defined using a legal entity identifier (LEI). These LEIs will need to be validated against the global database, currently maintained by the Legal Entity Identifier Regulatory Oversight Committee (LEI RO
There is an expectation that the Global LEI database maintained by the Central Operating Unit of the Global LEI System will be available and fully operative before the obligation to report transactions under MiFIR II starts. Further: Identification of individuals’ field by field analysis and Systems & Controls over transaction reporting. see detail Transaction Reporting User Pack (TRUP) here : https://www.fca.org.uk/publication/finalised-guidance/fsa-fg12-07.
- Identification of organisations
The Legal Entity Identifier (LEI) is a 20-character, alpha-numeric code, to uniquely identify legally distinct entities that engage in financial transactions. LEIs are issued by "Local Operating Units" (LOUs) of the Global LEI System (there is procedure given how to achieve LSE if there is not yet obtained) , let me know if need anyone information on this . The entity entrusted with the task to coordinate and oversee a worldwide framework for the Global LEI System is the Regulatory Oversight Committee (ROC) being a group of over 60 public authorities from more than 40 countries. The ROC was established in January 2013 as a stand-alone committee after recommendations by the international Financial Stability Board (FSB) and endorsement of the ROC Charter by the Group of Twenty (G-20) nations in November 2012.
The system is intended, in particular, to allow for financial transactions' monitoring on a global, cross-border basis. In the MIFIRs, The institution of LEI Registration Agent has also been introduced. This facility enables trading venues and systematic internalisers to assist the issuer applying for the LEI to access the network of LEI issuing organizations.
- Transmission of order – implications for buy-side
Legal obligation for firms to deliver complete and accurate transaction reports and my favourite topic area of Reconciliation are legally enumerated in Section C of MiFID Directive supplemented by Articles 38 and 39 of the Regulation (EC) No 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC,
- Transmission of order – implications for buy-side
- Basic trading scenarios (TBD)
- Reference Data standards
Instrument and underlying instrument identifiers in scope of (MiFID), as per Annex 1, Section C . Financial Instruments
- Transmission of order – implications for buy-side
- Legal obligation for firms to deliver complete and accurate transaction reports and my favourite topic area of Reconciliation
To be detailed is next is Blog Article, We will have detail typical solution article/ Blog View), I will decompose in detail step by step guide (anyone interested please visit our blog.
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