Global exchange operator Bats has made its MiFID II record keeping solution available for testing 16 months before reporting obligations come into force. Under the upcoming EU regulation, venues will be required to maintain a record of all orders advertised.
The solution will store all the data that is required under MiFID II. The data is saved in order to be presented to the exchange’s financial authority in case it is requested. The information recorded includes participants, client identification code, algo identification code and more.
David Howson, Chief Operating Officer at Bats Europe, said that the solution was developed in cooperation with the industry in order to: “Standardise the manner in which investment firms supply required data to our venues.”
He went on to say that, “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 harmonisation across the industry.”
The Bats record-keeping solution uses short-order codes for greater data protection. To be read, the short-order code requires a mapping file which is stored separately and is used to derive the national or algorithm ID asked for by the regulator. Short-order codes also reduce latency time.
MiFID II requirements also require trading venues to support algo testing for their customers. Bats is working on adding functionalities to its already-existing algo test environments. This includes simulating large price movements, where execution prices might vary +/- 10, in order to provide more comprehensive testing.
