Reference data has been placed firmly at the center of the revised Markets in Financial Instruments Directive (Mifid II), which came into force on January 3 this year, as it serves as the most critical tool for trade and transaction reporting transparency. SmartStream has responded to the market’s need for pre- and post-trade compliance by developing a utility—the Reference Data Utility—which promises to provide firms with access to all the European reference data they might need. The London-based firm’s win at the 2017 AFTAs reflects the industry’s hunger for technology solutions across the fickle and ever-changing regulatory landscape.
The RDU, founded as a partnership between SmartStream and a number of banks, is designed for all market participants that trade in reasonable quantities, but especially those with aspirations of becoming significant players in the post-Mifid world, from brokers that will be categorized as systematic internalizers under the new regime to firms that will serve as approved publication arrangements (APAs) on behalf of broker-dealers, as well as asset managers who, for the first time, will need to submit trade and transaction reports.
The RDU features data from a combination of sources, including the Association of National Numbering Agencies’ Derivatives Service Bureau, local markets and trading venues. Most importantly, it aggregates data from the European Securities and Markets Authority’s (Esma’s) recently established reference database, allowing users to calculate when they breach thresholds and must therefore submit their post-trade reports.
The platform promises to ease the way traders and market participants access reference data by making that data available in a single pool. Specifically, it removes much of the heavy lifting associated with the complexities of processing huge volumes of raw data, and it both simplifies and enriches information where necessary in order to create digestible datasets.
Peter Moss, the firm’s CEO, explains that the RDU offers two primary functions, already vetted by a number of the firm’s largest customers. “We offer a consolidated file of reference data which blends all these sources together so that users can get all the data they need of the instruments they trade,” he says. “We also offer a set of cloud-based functionality that people can call out to and enrich on a trade-by-trade basis the data they need.”
The service was launched on the day that Mifid II came into force in Europe, January 3, 2018. SmartStream aims to access all of Esma’s data, which it releases periodically since the database’s launch in mid-2017. Moss says that when this data becomes available, the RDU will be the market’s largest reference data pool.
Bloomberg's Gerard Francis comes on the podcast to talk about how data fragmentation issues are becoming more challenging.Subscribe to Weekly Wrap emails