The spirit and the letter of the reports

Each regulatory reporting meets an objective.

Remembering them allows you to ask the right questions and to support the options taken in case of questions from the supervisor.

During a recent mission to overhaul the production of regulatory reporting relating to investment services, this is what we did with the client.
For reports RDT and EMIR, not too many moods: the object is to provide AMF the completeness of transactions so that it can play its role of monitoring compliance with market rules.

The question arose in a more subtle way on the RTS28, established by MiFID II. This is a quantitative and qualitative annual report on the execution or transmission of client orders.

For a certain category of instruments, the desk acts formally on its own account vis-à-vis its client at the same time and under the same conditions as it initiates a transaction with another counterparty, the only difference being on the price of the 2 transactions, representing the desk margin. Should we include these transactions in the RTS28, formally being 2 transactions for own account?

The purpose of RTS28 is to be included in the section “Investor protection” of MiFID II. Not including them could have been viewed unfairly as an attempt at cover-up, while the margin is transparent and the job is done very professionally.

In such a case, no hesitation: do not torture your brain for days on the millimeter analysis of texts. Transactions have been included on RTS28 posted on the company's website, and we were able to move on.

pms@somerset-advisory.fr

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