Bats Europe Begins Client Testing for Mifid II Order Record-Keeping Requirement

The Mifid II rule, known as RTS 24, requires trading venues to record data during the trading day. The issue firms have faced is how to capture and store sensitive data without reducing efficiencies in order execution.

Bats' solution "captures short form IDs on orders and supplements them with a mapping file containing the underlying data, which can be provided at another time. This mapping file is stored securely until a regulator requires the complete order records," according to a statement from the exchange.

Sensitive data doesn't flow through the core trading system via Bats' solution, and latency from the delivery of large message sizes is minimized, according to the operator.

Another Mifid II requirement for trading venues is around offering a facility to support client testing of algorithms. Bats is upgrading its current facilities by adding several scenarios, including disorderly market conditions.

"In preparation for Mifid II, we've been working closely with the industry to standardize the manner in which investment firms supply required data to our venues. We believe our approach to the record-keeping requirements in Mifid II is a low-impact, secure method and we encourage other venues to adopt this approach to create harmonization across the industry," said David Howson, chief operating officer at Bats Europe, in a statement. "The RTS 24 requirements have been one of the most significant areas of development for Bats as it relates to Mifid II. We have put a lot of time and consideration into the development of this approach and we're pleased to roll-out testing of the solution, enabling our participants to test the process for more than 16 months prior to Mifid II coming into effect on Jan. 3, 2018."