Circular C238 (Transaction Reporting Requirements under MiFIR)

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Through the Circular, CySEC informs the Reporting Entities [Cypriot Investment Firms (“CIFs”), Credit Institutions, Market operators of Trading Venues, Approved Reporting Mechanisms (“ARMs”)] regarding the new requirements in the Transaction Reporting regime, in line with Article 26 of Markets in Financial Instruments Regulation (“MiFIR”) EU No 600/2014; that will enter into force on 03.01.18. Under the current framework, particularly Article 25 of Markets in Financial Instruments Directive (“MiFID I”) EU 2014/39/EC, Investment Firms (including Credit Institutions) which execute transactions in any financial instruments admitted to trading on a Regulated Market (“RM”) are required to:

  • report details of such transactions to their competent authority as quickly as possible, and no later than the close of the following working day. This obligation applies whether or not such transactions were carried out on a RM. Such reports are exchanged between competent authorities through an IT system established by ESMA (previously CESR), namely the Transaction Reporting Exchange Mechanism (“TREM”) which enables the competent authorities to:
  • detect and investigate potential cases of market abuse; and
  • monitor the fair and orderly functioning of the markets as well as the activities.

MiFIR, which will enter into force on 03.01.18, brings a number of changes on the abovementioned MiFID I transaction reporting regime, particularly by extending the scope of:

  1. financial instruments for which transactions should be reported (MiFIR captures additional financial instruments);
  2. information that should be provided per each transaction (MiFIR extends the information to be included in transaction reports compared to MiFID I from 23 data fields to 65 data fields).

For ease of reference and better understanding, the interpretation of terms used in the Circular is included in Annex 1 to the Circular. The following documents provide further information on the regulatory requirements relating to the transaction reporting regime:

  1. Title IV of MiFIR EU No 600/2014;
  2. Commission Delegated Regulation (EU) 2017/590 regarding regulatory technical standards for the reporting of transactions to competent authorities
  3. Technical Reporting Instructions ESMA/2016/1521 – MiFIR Transaction Reporting
  4. Guidelines ESMA/2016/1452 – Transaction reporting, order record keeping and clock synchronisation under MiFID II
  5. Questions and Answers on MiFIR Data Reporting – ESMA 70-1861941480-56


  1. Transaction reporting obligation: As per Article 26(1) of MiFIR, Investment Firms (including Credit Institutions) which execute transactions in financial instruments shall report complete and accurate details of such transactions to the competent authority as quickly as possible, and no later than the close of the following working day. Competent authorities shall then establish the necessary arrangements so as to ensure that the competent authority of the most relevant market in terms of liquidity for those financial instruments also receives that information. Also, upon ESMA’s request, competent authorities shall make available to ESMA any information reported in accordance with this Article.
  2. Financial instruments that are reportable: According to Article 26(2) of MIFIR, the obligation to report transactions applies to:
  1. financial instruments admitted or traded on a Trading Venue or for which a request for admission to trading has been made;
  2. financial instruments where the underlying is a Financial Instrument traded on a Trading Venue; and
  3. financial instruments where the underlying is an index or a basket composed of Financial Instruments traded on a Trading Venue.

Clarification:       The reporting obligation applies to transactions in financial instruments referred to, in point (a) – (c) above, irrespective of whether or not such transactions are carried out on a Trading Venue. The transaction reporting obligation captures all transactions on OTC Derivatives that the underlying is traded on an EU Trading Venue, as well as the transactions on Financial Instruments traded outside the EU but the underlying is traded on an EU Trading Venue. Although the term “Traded on a Trading Venue (“TOTV”)” is not defined in the Markets in Financial Instruments Directive (“MiFID II”) EU 2014/65/EU or MiFIR; ESMA has issued an opinion on 22.05.17 (ESMA 70-156-117) on what means OTC Derivatives TOTV. ESMA is of the view that only OTC Derivatives sharing the same reference data details as the Derivatives TOTV should be considered to be TOTV and, hence, subject to MiFIR transaction reporting obligations according to Article 26(2)(a) of MiFIR.

  1. Activity that is reportable: The activity that is reportable is the Execution of a Transaction as per Article 26(1) of MiFIR. The following clarifications are provided:
  1. The term ‘transaction’ is defined under Article 2(1) of Regulation 2017/590 as the conclusion of an acquisition or disposal of a Financial Instrument referred to in Article 26(2) of MiFIR.
  2. The term ‘acquisition and disposal’ is further clarified in Article 2(2) and 2(3) of Regulation 2017/590, respectively.
  3. The term ‘acquisition’ includes the following:
  • A purchase of a Financial Instrument
  • Entering into a Derivative Contract
  • An increase in the notional amount of a Derivative Contract
  1. The term ‘disposal’ includes the following:
  • Sale of a Financial Instrument
  • Closing out of a Derivative Contract
  • A decrease in the notional amount of a Derivative Contract
  1. The term ‘transaction’ also includes the simultaneous acquisition and disposal of a Financial Instrument where there is no change in the ownership of that Financial Instrument but post-trade publication is required under Article 6, 10, 20, 21 of MiFIR.
  2. Article 2(5) of Regulation 2017/590 specifies what should not constitute a transaction for the purposes of Article 26 of MiFIR, including repurchase agreements, stock lending, derivative novation and the expiration or redemption of instruments resulting from mandatory events that don’t involve an investment decision.
  3. Article 3 of Regulation 2017/590 explains further what means ‘execution of a transaction’ and includes the following:
  • Reception and transmission of orders in relation to one or more Financial Instruments (unless the order is transmitted in accordance with article 4 of Regulation 2017/590 then does not deem to be execution of transaction)
  • Execution of orders on behalf of clients
  • Dealing on own account
  • Making an investment decision in accordance with a discretionary mandate given by a client
  • Transfer of Financial Instruments to or from accounts
  1. Arrangements for submitting the transaction reports to competent authorities: As disclosed in Article 26(7) of MiFIR, transaction reports are submitted to competent authorities by:
  1. the Investment Firm itself, or
  2. an ARM acting on behalf of the Investment Firm, or
  3. the Trading Venues through whose system the Transaction was completed.

Clarification:       The operator of a Trading Venue reports to competent authorities, details of transactions in Financial Instruments traded on its platforms which are executed through its system by an entity which is not subject to MiFIR, or when an Investment Firm delegates to it the responsibility for reporting on its behalf.

  1. Content of Transactions Reports: Article 26(3) of MiFIR and Table 2, Annex I of Regulation 2017/590 state the fields that the transaction reports should contain; which are all mandatory unless stated otherwise. Special attention is drawn to the following new requirements:
  • details of the identity of the client and identifier and details for the decision maker (Article 7 of Regulation 2017/590);
  • identification of person or computer algorithm responsible for investment decision (Article 8 of Regulation 2017/590);
  • identification of person or computer algorithm responsible for execution of a transaction (Article 9 of Regulation 2017/590);
  • designation to identify an applicable waiver (Article 10 of Regulation 2017/590); and
  • designation to identify a short sale (Article 11 of Regulation 2017/590).

Clarification:       ESMA issued on 10.10.16 the Guidelines on Transaction Reporting, order record keeping and clock synchronisation under MiFID II – ESMA/2016/1451, which focus among others, on the construction of transaction reports, field by field for various scenarios that can occur.

  1. Legal Entity Identifier (“LEI”): Article 26(6) of MiFIR states that Investment Firms shall use a LEI to identify clients that are legal persons. Recital 14 and Article 13 of Commission Regulation 2017/590 state explicitly that Investment Firms should obtain LEIs from their clients before providing services which would trigger reporting obligation in respect to transactions carried out on behalf of those clients and should use these LEIs in their transaction reports. As of 03.01.18, Investment Firms will not be able to execute a trade on behalf of a client who is eligible for a LEI and does not have one. For more information about LEIs and the procedure that need to be followed by a legal entity in order to obtain one, please refer to CySEC Circular C237.



ESMA has developed a common specification for transaction reporting between competent authorities and submitting entities (as defined in Subsection 4 above), in the context of facilitating the application of Article 26(1) of MiFIR. Thus, ESMA published on 17.07.17 the Technical Reporting Instructions on MiFIR Transaction Reporting – ESMA/2016/1521, which describe the elements of the interface and overall processes that shall be built between competent authorities and submitting entities in their member states, which should be consistently implemented by all competent authorities. The following diagram shows the context and the key logical components of the transaction reporting and exchange architecture:

Detailed analysis of the logical components that the overall transaction reporting system comprises of, is available in the Circular.

CySEC’s expects that: CIFs must ensure that they are familiar with the new transaction reporting requirements and particularly, that:

  • all clients for whom the CIF carries out, on their behalf, transactions that are captured under transaction reporting, have a LEI;
  • the CIF implements a reporting system which, or ensure that its existing reporting system, is in line with the technical reporting standards and the applicable schemas;
  • the CIF follows the technical instructions mentioned in Annex 2 on how to create, sign and submit a transaction report/XML file to CySEC;
  • the submitting entity remains at all times responsible to ensure that all feedback files are analysed and all reports are corrected:
  • If a feedback containing file error is received, the entire file should be corrected and re-sent.
  • If a feedback containing content error is received, only the incorrect transaction report should be corrected and included in a new file sent to the CySEC (the new file may contain both, new transaction reports and corrections of previously rejected transactions).

The implementation date of the new transaction reporting regime is on 03.01.18.


CySEC will launch a trial period from 09.10.17 to 10.11.17 regarding transaction reporting, during which period, CIFs shall submit on a test-basis their new XML files. CIFs should perform validation tests before submitting any testing XML files to CySEC. Firms are encouraged to start testing in the early stages of the trial period so as to have enough time to correct possible errors and be ready for full implementation of the relevant requirements as of 03.01.18. For any assistance needed, CIFs should send an email to:

  •                           –              for regulatory issues and business aspects of transaction reporting;
  •   –              technical aspects of transaction reporting, to the email address.