A new European approach to transaction reporting

Abstract

The Markets in Financial Services Regulation and Directive (MiFID II) is part of the wider European Financial Services Action Plan. The main aim of creating a single market for financial services is to establish a stable, competitive and transparent financial services framework across the European Union. The primary purpose for transaction reports is to detect and investigate suspected market abuse, insider trading and market manipulation. Review of a transaction report is a key part of any investigation into alleged market abuse reported to any financial authority. Transaction Reporting is used by regulators to monitor and survey the market for any instances of market abuse. Failure to submit accurate transaction reports has the potential to hinder the Authority’s ability to detect and investigate suspected market abuse. The new transaction reporting regime will be standardised across Europe under the Markets in Financial Services Regulation. The article: •• Examines the purpose of transaction reporting •• Identifies scenarios of market abuse that transaction reporting helps highlight •• Examines Regulatory Change under the Markets in Financial Services Regulation (MiFIR). •• Reviews areas of failure to submit accurate transaction reports which firms need to consider in their regulatory assurance programmes.