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By Christian Thygesen | Regulatory Reporting Specialist | April 23rd, 2025

For any regulatory transaction reporting, knowing what trades are reportable is obviously a rather central question. For reporting under MiFID II / MiFIR, this is relatively simple to determine – at least on paper. If the instrument traded is traded on a trading venue (ToTV), then it should be reported, even if the trade in question did not take place on a trading venue. The alternative condition is, that the underlying instrument to the trade is traded on a trading venue, then the trade is also reportable, the typical example being an equity-option, where the option may be an OTC-instrument but the underlying stock would be traded on a trading venue (uToTV).

So the rule is simply, that if the instrument trades is (u)ToTV, then the trade is reportable. In theory quite simple, however for derivatives this is not so straightforward. Say you have a future traded on e.g. Eurex. A bank purchases this instrument, turns around and sells it to a client. In economic terms, the two instruments – the one traded on the venue and the one sold to the client – are identical, but still they differ in the sense that the future traded on Eurex will be cleared by a CCP and collateralized, where as the product sold to the customer may not be CCP-cleared and may not be collateralized. So is this “look-alike” identical (and thus reportable) to the exchange traded future or isn’t it? This has remained unclear and debated since MiFID II/MiFIR came into force in early 2018, and that may be the reason why MiFIR II will use different criteria to determine the reportability of an instrument.

For all securities and security-like instruments (and by this I mean certificates, warrants and ETDs) the ToTV logic remains unchanged. For OTC instruments however, the logic changes quite significantly. For interest rate derivatives, only cleared IRS in certain currencies and tenors are reportable. For CDS, only instruments in the 26 Global SIFIs are reportable. For all derivatives, the uToTV criteria remains. This implies that the overwhelming majority of FX and commodity derivatives will no longer be reportable. For CDS’s however, the uToTV criteria has the somewhat strange effect that the first order criteria (only CDS written on the 26 G-SIFI’s) becomes irrelevant, given that all CDS are written on a company issuing either equity or bonds and are thus covered by the second-order uToTV criteria.

The short of the matter is that the simple (u)ToTV criterion for reportability is replaced by a set of criteria which will reduce the number of trades to be reported but will make it more complex to determine which trades are and which trades are not to be reported.     

Product Owner Kenneth Brandborg, comments in regards to the enhancement of REGTECHDATAHUB’s capabilities: “It’s our number one priority to deliver customer value by solving specific complications in the everyday regulatory reporting.”

Challenges connected with SFTR reporting

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By Christian Thygesen | Regulatory Reporting Specialist | July 19th, 2022

REGTECH DATAHUB plays a key role in securing client’s SFTR back-reporting

In a recent case, a customer was struggling with SFTR back-reporting. Poor data quality and coverage were central to the customer’s challenges. In short, the lack of correct data in particular with regards to collateral meant that it took the customer a day to handle the rejects from the trade repository from a trade day’s worth of reporting, meaning that they would never be able to complete back-reporting.

The data issue could be split in two separate problems:

First, the customer’s current data provider was generally not able to provide all data needed for collateral reporting to be complete and correct in particular when it came to issuer LEI, CFI and collateral quality.

Second, a more specific problem was that for some bonds that had historically been used as collateral but had expired before the beginning of back-reporting, the data provider had no data at all.

The RTDH has stored all data that has been available from public sources at some point since Jan 1st 2018. This implies that the RTDH should be able to fulfill all data needs relating to bonds that have been accessible in ESMA’s various databases since before the launch of SFTR. (For EMIR – having launched in early 2014 – we may not be able to support all historic data needs. However, over the past couple of years, we have not faced a customer with EMIR back-reporting issues relating to 2017 or earlier).

It also means that we have a perfect record of any instrument having been issued by or traded on an EU/EAC/UK entity, and a pretty good record of any instrument having been reported as collateral.

The data quality & coverage of the RTDH was certainly good enough to reduce the number of rejections of the customer so significantly that they quickly managed to catch up with their SFTR back-reporting.

Product Owner Kenneth Brandborg, comments in regards to the enhancement of REGTECHDATAHUB’s capabilities: “It’s our number one priority to deliver customer value by solving specific complications in the everyday regulatory reporting.”

Why is it so Difficult to Get Started on Reporting on Sustainable Investments?

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By Søren Rahbek | Director | February 15th, 2022

Judging by the myriads of grand statements and complex regulations there seems to be near universal agreement that facilitating sustainable investments is the way ahead, as getting private and institutional investors excited will provide the necessary funding to transform the world economy

The transformation will of course also provide fantastic business opportunities for those, who get it right.

But it seems to be difficult to transform the good intention into the right products and solutions. All actors in the financial sector eco-system however appear engaged and willing to discuss. And maybe primarily willing to discuss.

And to be fair, it is not easy. When you start reading up on legislation, it is easy to get lost in SFDR, Taxonomy (and the respective technical specifications), MIFID II updates, CSRD, special local initiatives etc. and at the same time, there are very clear statements that the current regulation is just a starting point, and that today’s definition of sustainability not necessarily is valid tomorrow. The combination can be a bit energy-draining.

Ambition & Culture

An ambition to be on the forefront of sustainability investments also clashes somewhat with a culture, where financial market participants want to be 110% compliant to regulation after having burned their fingers on other regulations like AML/CTF. We are also used to thinking that annual reports and other financial disclosures are precise and can be considered close to absolute truths (which is never the case).

Getting the right disclosure to investors of intentions and results of sustainable investments requires enormous sets of data. An investment fund may easily hold more than 2,000 individual securities – and now the impact of more than 20 principial adverse indicators per security need to be considered for the fund.

The Demand for Data

The financial market participants are being pushed to demand these data from investee companies. The financial sector usually does what the regulators ask them to and generating the demand for data through regulation seems smart – and those who get it right, will also gain an advantage.

However, data is not easily available. Quite a lot of data points and observations are actually ‘out there’, but the data needs to be identified, collected, and linked together with other static data on the investee companies. FinDatEx’s work on the European ESG Template (EET) seems to promise a structured collection and presentation of data on investment funds and other products. This will be exciting to follow.

Let’s Get Started

In addition, a certain degree of pragmatism is required on all sides. We can never arrive at the perfect solution in our first attempt, but that should not prevent us from getting started. We may double count and we may not have enough data, but we should start and apply the logics and models, which we know work in other regulatory reporting.

We have worked under specific requirements for annual reports for more than 100 years – and the field is still developing, and all reports are subject to discussion. But we still prepare them as best we can. Let us do the same on ESG and work together to create a transparent market for sustainable investments.

How CMP Can Help

We at CMP want to apply our knowledge and experience in implementing all-new regulation to this field and to leverage the Data collection and structuring abilities, we have in our REGTECH DATAHUB. Please do not hesitate to reach out.