In October 2007 the FSA published guidelines for firms intending to use trade publication arrangements for post trade reporting. A trade data monitor (TDM) is a trade publication arrangement which has been confirmed as enabling a firm to meet the FSA’s guidelines. When the FSA published its guidelines it also published a list of TDMs.

Introduction

In October 2007 the FSA published guidelines for firms intending to use trade publication arrangements for post trade reporting (the Guidelines).
In the Guidelines it was stated that firms intending to use trade publication arrangements for post-trade reporting are under an obligation to verify that the systems:

ensure that information to be published is reliable, monitored continuously for errors, and corrected as soon as errors are detected;

  • facilitate the consolidation of data with similar data from other sources; and
  • make the information available to the public on a non-discriminatory commercial basis at a reasonable cost.

The Guidelines

The Guidelines cover 13 areas that firms need to satisfy and these include security, dissemination, identification of potentially erroneous information, monitoring, transparent charges and conflict of interest.

The FSA may amend the Guidelines from time to time to take into account a variety of factors including advances in technology and changes in market practice.

Meeting the Guidelines

The FSA considers that firms will have met the requirements set out in the Guidelines where they have used a trade publication arrangement which has been confirmed as enabling a firm to meet the Guidelines.

The FSA has developed two approaches to help firms assess whether trade data providers enable firms to meet the Guidelines and these are:

  • confirmation by the FSA that the arrangements enable the firm to meet the Guidelines; or
  • confirmation by an external auditor that the arrangements enable the firm to meet the Guidelines.

TDMs

A trade data monitor (TDM) is a trade publication arrangement which has been confirmed as enabling a firm to meet the Guidelines.

Obtaining confirmation by the FSA

In order to obtain confirmation from the FSA a trade publication arrangement must demonstrate that their systems and facilities can ensure that any firm who is their client will comply with the Guidelines. Part of this process will involve the trade publication arrangement commissioning a report from an auditor. The auditor’s report will confirm to the FSA the extent to which, in the auditor’s opinion, the trade publication arrangement will enable the firm to meet the Guidelines.

Viewing the auditor’s report

Should a firm wish to use an FSA confirmed TDM it should first request sight of the FSA letter of confirmation. This will help the firm when carrying out its own assessment of the adequacy of the trade publication arrangement’s services and facilities.

Where a firm wishes to use an auditor confirmed TDM it should first request sight of the auditor’s report.

Withdrawal of TDM status

Where the FSA or auditor considers that a firm no longer meets the trade reporting obligations under Article 32 MiFID implementing Directive it may withdraw the firm’s TDM status.

TDM list

A list of TDMs was set out on the last page of the Guidelines and they were:

  • Chi-X Europe Limited
  • Deutsche Boerse AG
  • London Stock Exchange plc
  • PLUS Markets plc (a Recognised Investment Exchange)
  • Reuters Limited