The ARM service – acting as agent in reporting to supervisory authorities under MIFIR requirements
On 3 January 2018, KDPW launched its Approved Reporting Mechanism (ARM) service. The ARM service consists of sending trade data to the relevant supervisory authority on transactions executed as part of trading in financial instruments on behalf of entities obliged to report such data under EU Regulation No. 600/2014 (MIFIR). Owing to delays in the implementation of EU Directive No. 2014/65 (MIFID II), KDPW will be offering ARM services on the basis of provisions of national law incorporated in legislation on the distribution of insurance services, until KDPW obtains official authorisation from the Polish Financial Supervision Authority.
An ARM is authorised to provide services throughout the whole EU. Reports are sent by the ARM to the relevant supervisory authority, depending on the domicile of the entity with the obligation to submit reports.
KDPW currently performs the role of intermediary in sending reports to the following supervisory authorities:
- The Polish Financial Supervision Authority,
- The Malta Financial Services Authority,
- The Portuguese Securities Market Commission,
- The Financial Conduct Authority (UK)
KDPW will enter into agreements with other supervisory authorities, depending on client demand. Those entities interested in using KDPW for ARM services can contact us via email: firstname.lastname@example.org
KDPW – know-how and complimentary services
KDPW has been operating a trade repository since 2013 in accordance with the requirements of EU Regulation No. 648/2012 (EMIR), broadening its experience and extending technology and processing solutions for receiving and storing derivative trade reports. The ARM service forms a part of the principal strategic aims of KDPW, this being the introduction, growth and development of new products in its existing range, including complementary services to those currently being offered to meet the needs of current and future clients, both at home and abroad.
KDPW includes its ARM offer within its broad range of post-trade services, providing clients the ability to meet the latest regulatory requirements.
Synergy for participants
KDPW offers various reporting models to meet the needs of clients, which enable all the mandatory reports to be submitted and for the ARM to use the data sent to the trade repository (with respect to derivative trade reporting), or trade data from platforms operated by the Warsaw Stock Exchange or BondSpot (with respect to reports on trades from these markets). Simplified trade reporting models allow participants significantly to limit the volume of data sent, while allowing them to comply with their MIFIR obligations.
KDPW offers an automated and secure communication interface and a tried-and-tested system for working together with supervisory authorities and participants. This ensures an orderly and uninterrupted process for ensuring that reporting obligations are met. As ARM, KDPW as a rule also assumes legal responsibility for submission of incomplete or overdue reports to the supervisory authority on behalf of the mandated entity.
Broad range of validation
The ARM service contains in-built tools for ensuring submitted data are complete and correct, including tools for detecting obvious errors and omissions. These tools include a set of formal and substantive controls managed by the ARM.
- Formal controls consist of the verification of authorisation of the entity to send reports to the ARM and of ensuring that the submitted xml file is compliant with the xsd schema processed in ARM system messages.
- Substantive controls consist of ensuring that the submitted data are correct.
Detailed information is available on the KDPW website in the description entitled Formal and Substantive Control of Messaging in the ARM System (data validation rules)
Information material of the Approved Reporting Mechanism (ARM) System
Directive 2014/65/UE (MIFID II)
Regulation (UE) 600/2014 (MIFIR)
Regulation (UE) 1033/2016
Regulation (UE) 648/2012 (EMIR)
Q&A on MiFIR data reporting