Connect with us

FINANCE

FIX Trading Community releases Recommended Practices for Commission Unbundling as required by MiFID II

Providing definitive guidelines to assist firms with unbundling prior to January 2018

FIX Trading Community, the non-profit, industry-driven standards body at the heart of global financial trading, today releases Recommended Practices for Commission Unbundling as required by MiFID II.

MiFID II has introduced the requirement to explicitly separate commissions into their component parts (e.g. execution, research) with a focus on the specific identification of the research component of the commission. In addition, MiFID II has introduced the concept of a research-payment account (RPA).  Previously, commission payments were generally handled in the background by Commission Sharing Agreements (CSA).

Over the past two years, FIX members have debated and discussed the European Securities and Markets Authority (ESMA) terminology and responded to updates across a number of different MiFID Working Groups. The FIX MiFID Commission Unbundling Working Group, in conjunction with the FIX Global Post Trade Working Group, has worked on producing a document that provides guidelines for pre-trade and post-trade representation of commission components for all asset classes, using the FIX Protocol.

Dave Tolman, Principal Services Analyst, Itiviti, Co-chair FIX Global Post Trade Working Group, noted, “The FIX Global Post Trade Working Group has worked for a number of years to facilitate industry-wide implementation of post-trade processing via FIX between buy-side and sell-side firms. This is a natural progression to address the MiFID II requirements that will affect many global firms.”

Rebecca Healey, Head of EMEA Market Structure and Strategy, Liquidnet, Co-Chair FIX EMEA Regulatory Subcommittee, commented, “It was important to have consensus across membership, as FIX has done across all MiFID Working Groups, with commission unbundling. With the assistance of the buy-side, sell-side and vendors we have been able to produce these specific guidelines to help the market address this requirement.”

David Pearson, Head of Post-trade, Fidessa, Co-chair FIX Global Post Trade Working Group, said, “After a detailed analysis of the regulations, and extensive industry consultation, the FIX Working Group recognised that the current guidelines and message specification needed to be enhanced to allow the post-trade process to handle multiple commissions on the allocation instruction and confirmation messages. This document provides important guidelines to assist firms ahead of the January 2018 deadline.”

The Recommended Practices document can be found here.

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Recent Posts