Transaction Reporting-Guidance TRUP Version 3.1

On 6 February 2015, FCA published as guidance version 3.1 of the Transaction Reporting User Pack (TRUP). Many firms will have already began setting up project teams and planning for MiFIR which is scheduled to come into force on 3 January 2017. However, as a result of this guidance, they will need to change course slightly and quickly implement fixes to systems and processes impacted by it.

The latest guidance is an update to version 3.0 published in March 2012 and seeks to provide additional clarity around:

• Where different trading capacities apply to different fills; firms need to ensure they report correctly to reflect the difference between the firms position and the client’s position. This is an area firms routinely struggle with and special attention should be drawn to the new guidance (section 7.5)
• How unit price should be reported for various instruments including spread bets, bond futures, index options and futures, and single stock options (section 7.15)
• Firms are permitted to use the facility ‘INTERNAL’ to link multiple market transactions to a client transaction but it is important to note that in such instances, the transaction reports submitted by firms must show a movement into ‘INTERNAL’ and out of ‘INTERNAL’ (section 7.18.2)
• Firms should ensure they report the Segment MIC of the venue on which they trade rather than the Operating MIC (exchange level) (section 7.19.1). Details of these two levels of MICs can be found here
• Where a firm hits its own order on a trading venue, there is a requirement to transaction report the resultant transaction to the FCA (section 9.1)
• Transaction reporting arrangements within firms are critical and FCA has clarified some of its expectations which includes the need for firms to perform comprehensive testing and end-to-end reconciliations in order to validate the accuracy and completeness of reports submitted to FCA (section 10.1)

Firms should review their current reporting to ensure it is in line with the latest guidance. Version 3.1 of the TRUP will be effective immediately, with the exception of the guidance introduced in sections 7.5, 7.18.2 and 9.1 above, which will be effective from 6 August 2015.

TRUP Version 3.1 can be found here.