Travelling to Paris today for tomorrow’s open hearing on MiFID II, the two issues I’ll be mulling over on the Eurostar will be record keeping for trading venues and transaction reporting. Both could potentially trigger significant changes in front and middle office workflows for many trading firms.

At the core of my concerns lies the requirement for trading venues to store their members’ own clients’ identifications (RTS 34), used by the member for transaction reporting (RTS 32). Full client details are often unknown at the time of order entry and only determined post-trade, in the middle office. So is ESMA proposing that all client information has to be collected and added to the order message prior to its submission to the venue, or that each venue must provide a second interface through which member firms can submit some data on a post-trade basis? Operationally, are we looking at pre-allocation of all buy-side orders?

It will be interesting to establish ESMA’s real intention and to see whether this holds up under a cost-benefit analysis. After all, ESMA already plans to collect that data in transaction reports.