Who Needs to Meet European Trade Publication Requirements?

MiFID II/MiFIR have been in place for more than two years, but there are parts of the regulations that still remain unclear for foreign exchange (forex) and contracts for difference (CFD) brokers. Namely, what is the difference between transaction reporting and trade & transparency reporting? 
Whilst most market participants are familiar with transaction reporting, many are not so certain on trade and transparency reporting, and whether they need to comply with this regulation. So, with the help of , we have set out to clarify the differences between the two.

What is transaction reporting?
Under MiFID II, financial firms are required to report transactions for executed financial instruments to trade repositories. In these reports, information such as the type of financial instrument traded, the firm actioning the trade, the buyer and the seller and the date and time the transaction was executed need to be included.
What is trade reporting?
Under European regulation, investment firms are also required to report the basic details of their trades almost immediately, so that the information can be circulated in the market. The aim of these reports is to improve the transparency of pricing and offer greater insight into how prices are quoted and formed.
In trade reports, the following needs to be included: trading date and time, instrument identification code, unit price, price currency, quantity, venue of execution, publication date and time, venue of publication, and transaction identification code.
As , Product Specialist, Regulation at Cappitech: “Receiving the trade reports are APAs which are chosen by the financial firm submitting the report. Once collecting the trade report, the APA is responsible for making the data available to the public. Similar to the obligation of financial firms to submit trade reports in near real-time, APAs are also required to publicize data as real-time as possible.”
What are the differences?
A crucial difference between transaction and trade reporting is the length of time a firm has to send the report. Out of the two, transaction reporting is more relaxed and must be reported latest by the next working day (T+1).
Trade reporting, on the other hand, operates in near real-time. Therefore, trading venues and certain investment firms need to publish the volume and price within one minute of the completed trade of equity or similar products. Firms have 15 minutes to publish this information for non-equity products, however, that is due to change this year.
Another key aspect that sets the two apart is the motivation behind the reports. The aim of transaction reporting is to locate and prevent market abuse. Because of this, more details of the client behind the transaction and anyone working on their behalf is needed and the information is not made public. Alternatively, trade reporting focuses on ensuring transparency within the market.
Below, TRAction Fintech has outlined the key differences between trade publication (TP) (also often called trade reporting) and transaction reporting (TR).