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MiFID II/MiFIR. The new European legislation – the new KDPW’s service.

KDPW (the Central Securities Depository of Poland) has taken steps to launch the Approved Reporting Mechanism ("ARM") service, , which means a person authorised to provide the service of reporting details of transactions to competent authorities or to ESMA on behalf of investment firms according to the definition laid down in Directive 2014/65/EU (“MiFID II”).

Our initiative results from the extended scope of information subject to the reporting obligation defined in the new financial market legislation: MiFID II and Regulation (EU) 600/2015 (“MiFIR”). The concept of KDPW’s ARM function has been developed in co-ordination with the Warsaw Stock Exchange (“GPW”) (which currently reports under MiFID I) and approved by the Polish Financial Supervision Authority (“KNF”).

According to Article 26(7) of MiFIR, investment firms shall have responsibility for the completeness, accuracy and timely submission of the reports which are submitted to the competent authority. Where an investment firm reports through an Approved Reporting Mechanism, such responsibility shall be attributable to the ARM (subject to Article 66(4) of MiFID).

KDPW, which has operated a trade repository for more than two years under Regulation (EU) 648/2012 (“EMIR”), has the experience and a range of technological and procedural solutions necessary to accept, maintain, and validate trade reports. KDPW’s ARM service will be developed on the basis of a rational business model which relies on the existing collaboration with domestic and foreign supervision authorities, in particular KNF, in the processing, disclosure, and ensuring the quality of reported data.

With automated, secured communication interfaces and KDPW’s existing model of relations with supervision authorities and participants, the selection of KDPW as the ARM will help entities subject to the reporting obligation to properly comply with the reporting obligation without interruption. The solution will be particularly advantageous to KDPW trade repository participants because all trade reports sent to the repository, containing details of transactions required under MiFIR (Article 26(1), (3) and (9)) will be provided to the competent authority, ensuring compliance with the obligation of the reporting entity under MiFIR.

KDPW is currently working to develop the target business model and the relations with participants in the ARM service.

According to Regulation (EU) 2016/1033 of 23 June 2016 amending Regulation (EU) No 600/2014, the trade reporting obligation under Article 26 of MiFIR shall apply as of 3 January 2018.

If you have any questions about KDPW’s ARM service, please contact us at: arm@kdpw.pl.

Useful links:
Directive 2014/65/UE (MIFID II)
Regulation (UE) 600/2014 (MIFIR)
MIFIR RTS
Regulation (UE) 1033/2016
Regulation (UE) 648/2012 (EMIR)
Q&A on MiFIR data reporting
Last modified:13-04-2017 Go up