ESMA's requirements go live in

days

hours

minutes

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We take care of your order record keeping obligations within RTS24

We take care of your order record keeping obligations within RTS24

RTS 24 affects all members trading on European venues

ESMA’s requirements regarding order record keeping creates major challenges for members.
The requirement from ESMA

MiFID II introduces a requirement for operators of trading venues to collect and maintain considerable amounts of order data throughout the trading day. Among the new order attributes, defined in RTS 24 - Maintenance of relevant data relating to orders in financial instruments, are codes for "Client identification", "Investment decision within firm" and "Execution within firm".

The solution from trading venues

To avoid sensitive data flowing through the trading system and to reduce the impact of increased latency some trading venues have declared that they will implement solutions where client and personal data is identified through ‘short codes’ at order entry. Prior to order entry or at the latest by the end of the day, members will be required to supply information describing mapping of each short code used on orders.

Status and challenges for members

Currently there is no harmonization between the trading venues regarding the format and structure of new short code solutions. In addition to this there is no standardization regarding the ability to provide reconciliation for a member that is compliant with the demands from the trading venues. On the 3rd of January, 2018 this new requirement from ESMA will go live for all trading venues. The indirect impact on the members trading on all venues in Europe will be enormous and will compound the direct requirements towards the members.

Order flow and corresponding order record keeping (ork)

The introduction of short codes at the point of order entry drives major changes in the core order management systems hosted by the trading member. Furthermore the order sent to a market must be stored, regardless of whether or not the order resulted in a corresponding transaction. Each respective member firm has the best capability to solve this challenge either internally or with consultancy help discussing the solution and setup with experts in this fields. Most member firms are directing their energy and focus towards resolving these challenges today, otherwise they run the risk of being excluded from all European markets.

Short code / long code mapping

The short code used at the point of order entry must have a relationship to the long code mapping already stored so that it can be sent to the trading venue, either pre- or post- population. This may not appear to be that difficult however in a complex environment with a wide variety of OMS, distributed customer databases and many market gateways, this challenge soon raises many questions and issues thus driving complexity exponentially. In addition to this it is possible a trading participant may have many partners using DMA and Sponsored Access which adds further layers of complexity and challenges into the scope. The final variable to be added is the continuous and ever more demanding regulations and subsequent challenges regarding the distribution and sharing of sensitive customer data between all parties involved.

Secure reporting of mapping data to all trading venues

The third major challenge is to correctly report all short code/long code mappings to every trading venue that the member participant, or it’s DMA/SA-partners, has communicated to. Again, this may appear to be a relatively straight forward task however the deadline of the 3rd of January 2018 is rapidly approaching and this, combined with a lack of existing information regarding current specifications from the more than 250 venues, means that this is a complex challenge. The European Market Operators are currently working to develop solutions that ensure that all their trading venues are compliant with ESMA’s new requirements. They do not have an obligation, nor the time and focus to find an easy and harmonized way of solving the problems that the member firms are now facing. This third major is the focus of our ELIN solution, please read more below.

The three major challenges in order record keeping

Order flow &
corresponding
order record
keeping
Short code
/long code
mapping
Secure
reporting of
mapping data
to all trading
venues

ELIN harmonize and secure your short code reporting

ELIN harmonize and secure your short code reporting

  • Reporting of complementary order data
    Secure and reliable reporting of all short code/long code mappings to every trading venue that the member participant on.
Reporting of
complementary
order data
Secure and reliable reporting of all short code/long code mappings to every trading venue that the member participant on.
  • Reconciliation and compliance
    ELIN keep track of all missing mappings and make sure that you are compliant with the trading venues demands, now and in the future.
Reconciliation and
compliance
ELIN keep track of all missing mappings and make sure that you are compliant with the trading venues demands, now and in the future.
  • Broad coverage of trading venues
    ELIN support's all leading operators in Europe such as BATS, Deutsche Börse, Euronext, London Stock Exchange, Nasdaq, Chi-X, Oslo Börs etc.
Broad coverage
of trading
venues
ELIN support's all leading operators in Europe such as BATS, Deutsche Börse, Euronext, London Stock Exchange, Nasdaq, Chi-X, Oslo Börs etc.

Other features

  • Multi asset class support
  • Support for REST based integrations
  • Secure and reliable solution
  • Support for file mappings (CSV)
  • Order Record storage
  • Multi language administration web client
  • Real time order capture
  • Support for DMA and SA arrangements

FAQ

Q: Which operators of trading venues are supported by ELIN?
A: The largest operators in Europe are currently supported and our goal is to support all trading venues that request ELIN.
Q: What does the service cost, once a customer?
A: This depends upon factors such as supported trading venues, number of short codes being used, modules activated and installation setup.
Q: Our organization has many skilled developers, why shouldn’t we solve this problem ourselves?
A: Use your talents to manage your core business. For LeanOn, this is our core business. So our incentive to provide a service that meets your needs is critical to us.
Q: But it’s just a CSV file with short code and long code mappings, what’s all the fuss about?
A: Unfortunately it’s not that simple. Especially if you are trading on multiple trading venues. All market operators have a different technical solution and demands. In addition to this, the reconciliation possibilities vary greatly between operators, making it difficult to ensure that you have correctly mapped all necessary short codes.
Q: Which customers have already implemented LeanOn’s solution?
A: We already have contracted a number of large European organizations for our solution however due to confidentiality clauses we are at this stage unable to publish any detailed information.
Leanon
LeanOn is an independent Swedish IT-company that has been delivering software and services to the financial industry since the late 1990’s. With some of the largest financial institutions in the Nordic region as customers, LeanOn has a strong market presence and possesses branch leading knowledge, particularly within the security trading segment.

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