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Who makes the decisions around here?

Recording the execution decision maker is a new requirement under MiFID II. Working out how to populate that field turns out to be trickier than expected.

Take a buy-side that gives strict execution instructions on how to execute its agency care order. On the one hand, you could argue that the sell-side made no decisions and therefore records NORE (MiFID II speak for client). On the other hand, you could say that by accepting the order and the instruction the sell-side made the decision. In comparison, DEA flow is straightforward, as ESMA provides an explicit example in its guidance, clarifying that the DEA provider should record NORE. This makes sense, as the DEA provider and its software, by its very definition, merely provides electronic market access. But suggesting that a human trader accepting orders on a phone makes no decision might be worthy of discussion. Either way, as was the case with the introduction of EMIR transaction reporting, even post go-live there will be plenty of MiFID II rules that need some fine tuning.

 

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