Since the beginning of the year, brokers have had to comply with additional requirements for reporting obligations. MiFIR reporting has started with some mild hiccups in some jurisdictions, but those were quickly rectified as the rollout of MiFID II has been deemed rather smooth at this point, almost three months into the year.
The Cyprus Securities and Exchange Commission (CySEC) has sent out a letter to brokers that have been deemed to be trailing on their reporting obligations. The regulator has actually been analysing the transaction reports that were received via the centralised Transaction Reporting Exchange Mechanism (TREM).
The companies that have missed reporting have been instructed to examine the situation and submit an answer to the Cypriot regulator about the reasons for the delay by the 22nd of March.
CySEC is urging brokers to take the necessary measures to address the matter and submit their data to the technical system that the regulator implemented. The review of broker submissions was carried out in January.
Last September, CySEC sent out to brokers a circular informing them of their obligations within the new transaction reporting regime. Some Cyprus Investment Firms who were reporting through ARMs may have also have received the letter in error, due to the well publicized NCA connecting issues in the early days of MiFID II.
The Markets in Financial Instruments entered into force on 3 January 2018. The regulation mandated Cyprus Investment firms that execute transactions in financial instruments to submit a thorough report of derivatives transactions to CySEC.
In their answer to CySEC, companies are expected to provide detailed information about the financial instruments on offer. The Cypriot regulator states that brokers may be exempted from submitting transaction reports if they can provide evidence of technical or other issues with the submission process.