Amongst other things, MiFID II’s transparency reforms intend to clean up the quality of post-trade data and eradicate duplicate prints – long-suffered bugbears for investment firms. But in simply stating the rules, ESMA has left buy- and sell-sides puzzling over just how significant a change this is. A look at the cost benefit analysis the regulator published in September last year reassured me that a sweeping reinvention of the wheel is not the intention.

The brokers’ exchange-traded domain looks likely to remain unaffected, aside from the handling of new, harmonised trade flagging and of waiver IDs to help regulators and exchanges count for the equity dark caps. But it is ESMA’s clarification of OTC reporting responsibility that may have a much wider impact. OTC trade publication responsibility falls squarely with the seller, according to the text, so now the buy-side is potentially looking to budget for an APA as well as an ARM on their MiFID II shopping list. With impact more likely to be in the non-equity space, asset managers will either have to get up to speed with trade reporting themselves or look to delegate the task, with possible inducement implications. Either way, they are still responsible for publication and need to have reconciliation controls in place. Only where one side to the OTC trade is an SI can the buy-side stay clear of this obligation. As the implementation details continue to unfold and the shopping list grows longer, it’s plain to see that the cost of regulation is only going to go up.