CySEC collects CIF transaction data ahead MiFID II implementation


MiFID II implementation is scheduled on the 3rd of January, 2018. Ahead of the event, CySEC prepares CIFs for the new scope of financial instruments. 

1 February, AtoZForex The Cyprus Securities and Exchange Commission (CySEC) has just published the new circular for the Cyprus Investment Firms (CIFs). The Cypriot watchdog informs CIFs that the Directive 2014/65/EU on markets in financial instruments (MiFID II) and the Regulation 600/2014 on markets in financial instruments (MiFIR) bring a number of amendments in the scope of the financial instruments that are in the coverage of existing MiFID.

What will be changed in accordance with MiFID II implementation?

The MiFID II and MiFIR will apply on the 3rd January 2018. The Cypriot regulator has just stated these regulations will change the scope of current financial instruments of MiFID. For instance, the range of the transaction reporting responsibility is now being extended beyond instruments for trading on regulated markets. Now, the scope will include the instruments trading on Multilateral Trading Facilities (MTFs) and Organized Trading Facilities (OTFs).

Moreover, the range will involve financial instruments, which have instruments trading on trading venues as an underlying, according to CySEC.

Additionally, the prior and post transparency necessities are now adjusted for various types of the financial instruments. As a fact, before, these requirements were addressing only equities. Now, they are amended for bonds and derivatives.

CySEC requests data from CIFs

The regulator stated that in order to successfully implement the changes that are mentioned above, it will need to gather particular information from CIFs. Such information includes the data on the volume of the transactions executed by the CIF on behalf of clients for each asset sub-class of financial instruments in comparison to the overall volume of the transactions executed on behalf of clients for all asset classes of financial instruments in the CIF portfolio.

In order to obtain such data, a thorough calculation is required. The Cypriot regulator asks CIFs to note the following in the official circular:

-Where transactions are performed with leverage, this should be included in the reported volume.

-For transactions in CFDs, include in volume those transactions that were closed within the reporting period.

-Any transactions that for rollover purposes are closed and re-opened the next day, should not be included in the reported volume of transactions (this applies to forex transactions or other transactions that have a very short period of time (i.e. opened one day and closed the next)).

Ultimately, the Cypriot watchdog demands CIFs that have the authority to provide the investment services listed in point 2, (Execution of Orders) and 3, (dealing on own account) of Part I, Third Appendix of Law 144(I)/2007, to submit the filled in Form latest by Monday, 13th, 2017.

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