Approved Reporting Mechanisms (ARMs)
The Markets in Financial Instruments Directive ("MiFID"), which replaces the existing Investment Services Directive, will significantly change the regulatory regime governing transaction reporting.
One of the important changes imposed by MiFID affects the regime governing the systems used by regulated firms to report transactions. In particular, we will require all reportable transactions to be reported through systems which comply with specific requirements detailed in Article 12 of the the MiFID Level 2 Regulation. The FSA refers to transaction reporting systems collectively as Approved Reporting Mechanisms ("ARMs").
Fees
There is an application fee of £20,000 for firms seeking to become an ARM. We calculate that this amount will help us meet the costs of approving systems and make a proportionate contribution to the costs of linking with our transaction monitoring system, Sabre II. For further details on the ARMs application fees, please see FEES 3 in the FSA Handbook.
The non-refundable fee (via cheque made payable to the Financial Services Authority) should be submitted with the formal application. Please note that we would be unable to progress an application without the application fee.
Application form
Should organisations wish to consider applying for ARM status, we would encourage you to review the technical specification document before submitting the application form. For a copy of the technical specification, please contact the Transaction Monitoring Unit.
Please note that you will be asked to sign a non-disclosure agreement prior to receiving a copy of the technical specification.
Approved ARMs
The first group of applicants have now been approved as ARMs.
The ARM approval process has comprised two stages. Firstly, the approval of the written applications, and secondly, the approval from an information technology testing perspective. Both of these stages have now been successfully completed.
The creation, production and delivery of these systems remain the responsibility of the applicant, and the FSA does not accept legal responsibility for any losses or damages arising from the failure of these systems. In particular, the FSA's high-level review of the business continuity and network security policies of each applicant does not imply any endorsement, guarantee of quality or acceptance of responsibility for the adequacy of any applicant's business continuity or network security systems.
Table 1 lists the approved ARMs. Please note that 'restricted approval' applies to all potential ARMs who are able to submit transaction reports only for certain types of products/instruments.
| Organisation | System | Status |
|---|---|---|
| Credit Suisse Securities (Europe) Limited | DARE | Approved |
| CrestCo Limited | CREST | Approved (Restricted) 1 |
| Financial Services Authority | TRS | Approved |
| International Capital Market Association | TRAX 2 | Approved |
| London Stock Exchange | ERS | Approved |
| Omgeo Limited | OTR | Approved |
Table 1: List of approved ARMs
1 Firms will not be able to submit transaction reports for (i) non-exchange instruments and (ii) instruments without International Securities Identifying Number ("ISIN") codes.
NOTE: MiFID prescribes that, in addition to reporting through ARMs, transaction reports can be sent to the FSA by the regulated market or multilateral trading facilities ("MTFs) through whose systems the transaction was completed.
MiFID requires that all transactions reported through the methods described in Article 25(5) shall satisfy the specific requirements detailed in Article 12 of the the MiFID Level 2 Regulation. To ensure compliance with these requirements regulated markets will need to submit transaction reports in the format provided by the FSA's defined technical specification.
The table below lists regulated markets and MTFs who have successfully completed testing of the technical interface with the FSA and which will be reporting transactions that have been completed through their systems.
Please also see Regulated Markets and MTFs.
| Organisation | Website |
|---|---|
| SWX Europe Limited | www.swxeurope.com |
Timelines
We will be publishing details of the next application window and timelines on this website shortly.
Regulated firms
We would encourage all firms, if they have not done so already, to contact approved ARMs directly to ensure all their systems are compatible and transaction reporting can continue to operate smoothly post-MiFID.
Please note that we have not specified the technical format that firms need to use to send transaction reports to their respective ARMs. Firms need to ensure that they comply with the format specified by the ARM(s) that they use.
Additional information
- General procedures necessary to ensure that transaction reporting systems used to submit post-trade reporting to the FSA are in compliance with the requirements imposed by MiFID have been set out in the July 2006 Approved Reporting Mechanisms paper.
Draft July 2006 Approved Reporting Mechanisms [PDF] - An update to this paper was issued in February 2007.
February 2007 Update [PDF] - The UK Content of a Transaction Report paper outlines a list of fields for transaction reporting purposes and defines the data standards required for the population of these fields.
UK Content of a Transaction Report [PDF]