OpRisk Awards 2016
Dealing with the complex reporting requirements of multiple regulations has been one of the great challenges of recent years for financial market participants, but it has also been an opportunity for service providers seeking to relieve the operational burden of reporting.
UnaVista has been more successful than most, supporting major European reporting mandates as well as those of Australia, Singapore and Hong Kong. Based in London and wholly owned and hosted by the London Stock Exchange Group, UnaVista's clients include banks, buy-side firms and market infrastructure providers. The service currently boasts roughly 50,000 individual users, with around five billion transactions processed each year.
"Driven by the regulatory agenda of increasing transparency in financial markets, our goal has always been to take the IT challenge of regulatory reporting out of clients' hands with a competitively priced, web-based application," says Mark Husler, chief executive of UnaVista.
Given Mifir reporting will cover more asset classes and data types, the Accelerator is intended to help firms test in advance and make sure they have everything in place
Mark Husler, UnaVista
UnaVista is the only entity to have been approved as both a trade repository under the European Market Infrastructure Regulation (Emir) and an approved reporting mechanism (Arm) under the Markets in Financial Instruments Directive. It also plans to apply to become an Arm under the Markets in Financial Instruments Regulation (Mifir), which will come into effect in 2018.
In September 2015, the Depository Trust & Clearing Corporation (DTCC), a rival New York-based repository, signed an agreement to connect to the UnaVista Arm so that its own clients can comply with Mifir through their connection to DTCC. The agreement was a powerful sign of UnaVista's growing influence in trade reporting.
"As additional reporting requirements such as Mifir come to market, we believe it is critical that all service providers look to leverage rather than duplicate existing infrastructure to ensure the overall operational cost burden to the industry is minimised," says Andrew Douglas, chief executive of the DTCC's Global Trade Repository in Europe.
UnaVista also helps firms to get their data into the correct format for regulatory reporting. Its so-called Mifir Accelerator tool allows users to import data from multiple sources and compare it with regulatory technical standards to determine any gaps that must be addressed, and quantify the number of new legal entity identifiers they and their clients need to obtain for Mifir.
"Our experience with Emir was that many firms left it until late in the day to get ready, but given Mifir reporting will cover more asset classes and data types, the Accelerator is intended to help firms test in advance and make sure they have everything in place," Husler explains.
The shortcoming in many reporting services, Husler believes, is that they take what he terms a "fire-and-forget" approach, whereby trade details are received from the client and forwarded to the relevant regulator without any sophisticated reconciliation or exception management to ensure trades are recorded in multiple systems consistently.
"We don't just validate the trade data and send it on; we compare it to the reference data to make sure it is accurate. We reconcile the trades across our own system, the client's system and the regulator's system. That reduces regulatory risk and provides a much more valuable service to the client," he says.