MiFID II FAQs
This guide is for clients who trade with an EU/EEA-based Tullett Prebon (“TP”), ICAP or PVM entity. The information contained herein is designed to help you trade with us in a MiFID II-compliant manner from 3 January 2018.
The guide has been created to answer some of the frequently-asked MiFID II questions and will continue to be developed over time in response to additional questions that are raised.
The questions are grouped in the following categories as listed below:
How will your organisation be structured post 3 January 2018 under MiFID II?
Between them, Tullett Prebon, ICAP and PVM will separately operate several Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs). Clients will be able to interact with brokers and trading platforms in a similar manner to today. The trading venues will support all MiFID II asset classes currently traded and new products.
Will all EU/EEA brokers be operating under either an MTF or OTF?
Depending on the asset class, brokers of TP ICAP group companies in the EU/EEA will operate inside an OTF and/or be able to access other trading venues to register trades and place orders on behalf of clients.
Will it be possible to register orders on an OTF/MTF on behalf of our clients?
Provided that your firm is onboarded as a venue user/participant for the relevant trading venue, then (subject to the rules of the trading venue) you can place interests and orders on behalf of clients. However, the person submitting the interest is responsible for interaction with the trading venue and any resulting transaction. The booking, reporting and individual data requirements will vary per asset class.
Can we continue to trade OTC?
When doing business with Tullett Prebon, ICAP or PVM in a multilateral environment, the arranging activity is expected to be either on a trading venue or under its rules. The scope of the OTC markets is being restricted by the MiFID II rules. However, certain transactions (such as spot FX or commodities transactions) will continue to be arranged in the OTC markets.
What is the onboarding process?
The onboarding process ensures that Tullett Prebon receives all required information from our clients to ensure compliance with the new regulations. It also ensures that clients have reviewed and agreed to comply with all appropriate trading venue rulebooks, terms of business and policies.
Please contact us at email@example.com.
We deal with Tullett Prebon, ICAP and PVM. Is there one single onboarding process?
Yes, there is one process to apply for all venues with one authorised signature per entity.
What data do I need to provide to Tullett Prebon, ICAP and PVM?
In order to trade with Tullett Prebon, ICAP and PVM, we will require certain data about your firm and its personnel. TP ICAP group companies have issued a MiFID II Data Directory.
This will cover:
- The data we require for processing and reporting trades and orders under MiFID II; and
- Information which TP ICAP group companies will supply you with to support your reporting and record-keeping obligations.
Please use the contact us details found on the Venue pages to request a copy of the document.
Below are a selection of data related FAQ. Please refer to the TP ICAP MiFID II Data Directory for further information.
What is a Legal Entity Identifier (LEI)?
An LEI is a twenty-character code that is unique to a legal entity. It is based on the ISO 17442 standard and is used by regulators globally. Clients must provide an LEI for each of their legal entities that intends to trade in the EU/EEA.
How do I request an LEI?
If you do not have one, you can request your LEI by contacting your preferred business partner from a list of LEI issuing organisations. Information about how to obtain an LEI can be found at the Global Legal Entity Identifier Foundation website, click here.
How do I provide you with the LEI?
The Global Legal Entity Identifier Foundation website includes a database that can be searched to obtain LEIs of firms that have already registered with an LEI-issuing organisation. While we will periodically search that database, to ensure accuracy you will also need to provide this information on the Data Gathering Sheet we have uploaded to the BBEE portal.
What will be the enforcement policy for LEIs and trader personal data from 3 January 2018? Will you prevent or allow trades where data is missing and then ask for input of the data before the next day?
According to current regulatory guidance, failure to provide an LEI will prevent transactions from being reported correctly. If you do not have an LEI, then please see above for the process to obtain one. The collection of underlying personal data is a reporting and record keeping requirement for all venues. Workflow and governance procedures are to be finalised for personal data, but we require all users to supply this.
How do you plan on implementing the RTS 24 obligation to obtain Investment Decision Maker and Execution Decision Maker data from participants?
We will be asking you to provide short codes for the Investment Decision Maker (IDM) and the Execution Decision Maker (EDM) who are interacting with Tullett Prebon, in advance of MiFID II go-live. We will also be working with an external partner to store the personally identifiable information (PII) data, which will be held in a secure repository for record-keeping and transaction reporting purposes.
What is the format of short codes?
The short code is defined by you. We are expecting a unique code for each of the Execution Decision Makers (EDM) and/or Investment Decision Makers (IDM) who interact with us. Our recommendation is that the short code is somewhere between 8 and 25 characters to ensure individuality. It should not be an email address.
How do we create short codes?
Short codes can be created by you from any sensible source. As an example, some firms use their internal HR systems ID.
How do we provide you with our short codes?
We will be sending clients a template by email for you to complete in advance of go-live.
Does pre-trade transparency apply to my orders on European venues?
Trading venues operated by TP ICAP group companies will fulfil their pre-trade transparency obligations through the publication of all eligible orders.
Pre-trade waivers will be applied where appropriate. We expect our venues to be authorised to fully utilise all available waivers.
Publication of pre-trade data is being undertaken on behalf of the trading venues by Tullett Prebon Information, part of TP ICAP group's Data and Analytics division.
How will I access the pre-trade transparency data?
Publication of pre-trade data is being undertaken on behalf of the trading venues operated by TP ICAP group companies by Tullett Prebon Information, part of
TP ICAP group's Data and Analytics division. The data will be accessible via existing methods of delivery through a machine-readable feed, via data vendors or via a dedicated website where access will be entitled using a username and password.
Will there be a fee for the transparency data?
There will be a price list for the transparency services which will be available on request.
Data will be provided under licence. The terms and conditions of the licence are available on application.
Will you be providing us with transaction reporting?
Tullett Prebon trading venues will report transactions to regulators where required, but an additional transaction reporting service is not being offered. Venues have a responsibility to report transactions executed on their venues where the participant is a non–MiFID II firm under RTS 22 and is not otherwise required to transaction report under local rules.
As part of the MiFID II onboarding process, each trading venue user/participant will be required to confirm whether their firm is classified as a MiFID II Investment Firm. This will then be verified by the onboarding team.
How will TP ICAP support clients with record-keeping?
At the end of the trading day, each trading venue will make available to its venue users/participants a recap file of all firm orders submitted by them to that venue. This will not include information for Indications of Interest (IOIs). Please see the Venue Rulebooks for details on the distinction between orders and IOIs.
What is included in the End of Day (EOD) Report for Transactions?
The file will include Trading Date Time, ISIN (International Securities Identification numbers), Waiver Indicators, Transaction Reference Number, Trading Venue Identification Code, Venue, Complex Trade Component ID and Venue Product Code.
How will the End of Day Report be provided?
All of the trading venues operated by TP ICAP group companies will make trade information available via Tullett Prebon Information, part of TP ICAP group’s Data and Analytics division.
Can the EOD file be received as an email drop copy?
We are still planning the functionality for EOD files, but it is likely that they can be sent as an attachment to a scheduled email if required.
What technology changes are you making?
TP ICAP group companies are creating a consolidated reporting facility built around a single repository for gathering, storing and archiving time-stamped MiFID II-required data to support all the reporting requirements.
Whilst there are significant changes being made to the middle and back-office technology suites, there are only a limited number of changes being made to client-facing screens and APIs.
Changes to the proprietary feeds will be communicated to customers via our Client Services team as normal. Testing will also be coordinated by that team.
What technology changes require client testing?
Trader UI – Encourage Testing: Trading screens include new MiFID II fields and API enhancements to send orders and affirm trades
STP Feeds – Recommend Testing: STP messages will include new MiFID II-specific data fields to report trading venue, waiver codes, trading capacity and transaction ID for packages.
End of Day Recaps – Recommend Testing: EOD Order and Trade Recap files will include new MiFID II-specific data fields, including trader ID, venue MIC and UTC standard date and time.
How do I sign up to participate in the connectivity testing sessions?
You should have already been contacted by our client services team. If not, please contact firstname.lastname@example.org.
Will a non-EEA client of a Tullett Prebon, ICAP or PVM voice broker be considered to be a venue user of the OTF?
If you wish to access the OTF as a venue user, you will need to be onboarded as a client of the firm operating the OTF. If your trading interests are only submitted to the OTF via a broker who is a venue user, then you will not need to onboard as a venue user of the OTF.
In any event, the rules of the OTF will apply to any trade request that is submitted or transaction that is executed on or through the OTF, and you should familiarise yourself with the OTF rulebook.
Can you confirm who to contact at your firm in relation to any MiFID II queries?
Please use the specific contact us details found on each of the Venue pages. For onboarding enquiries please contact, email@example.com .
Our responses to the AFME MiFID II questionnaire template may also be useful. Please use the contact us details found on the Venue pages to request a copy of the document.
TP ICAP held three regional client webinars. The audio and materials are available to download from the TP ICAP group website, click here