Apologies if there is guidance on this already but I haven’t been able to track it down
Re the upcoming FCA RTS 1 changes and the designated reporter (DR) regime; some parties seem to be looking for tag 8015=5 to be used to indicate an order from party registered as a DR.
(8015 OrderAttributeTypes - flattened version of OrderAttribute component, 5 indicates a systematic internaliser)
To some extent I understand the rationale, as the flag today is used to indicate if the client is an SI and will thus trade trade report
whereas the proposed use is to indicate if the client is a DR and will trade report (in some cases, ie if selling)
However it seems a misuse? The client will be saying they are an SI when they potentially are not and DR rules are not exactly the same as SI rules - specifically the DR regime / sign up is at an entity level, whereas SI classification is not. Surely a flag is not needed on all orders if its an entity wide setting?
Is this an Industry wide convention? Are others adopting it?
This actually came up in our equities consolidated tape working group today (I suggest you join that if you’re part of a FIX member firm). We previously weren’t sure whether we even needed this field with the introduction of the DR/DPE regimes but have concluded that a) there is merit in keeping it and b) we need to do something to it similar to what we did with tag 2524 (trade reporting indicator), which is to replace references to SI with an ‘authorised reporter’. The term ‘authorised reporter’ would refer to the appropriate entity type under the relevant regulation, i.e., SI for now (EU and UK), DR from end April in the UK, DPE from whenever the EU change goes into effect. The key point is the field and value will remain as they are today - it’s the description/elaboration that would change, so (in theory) no system changes.
To flag that a particular party is the designated reporter this feels like this would be part of the Parties component and not the OrderAttrib. As I understand it it is to flag who (i.e. which party) is the DR.
Although I am still slightly nervous about it, the regs make it clear being a DR is an entity level agreement with some provision for agreement for 2 parties to agree otherwise
“we will amend our proposed requirements to provide the option for DRs to bilaterally agree,
explicitly and in advance, which party shall fulfil the reporting obligation.The seller will always have the regulatory obligation to report but may discharge this by entering into an agreement with the buyer whereby the buyer agrees to report on its behalf.”
Supporting sending it in an an order by order basis is giving our clients the ability to make this decision on an order by order basis (and we do have clients who are proposing varying this setting depending on the desk that the order has originated from); which doesn’t seem appropriate?
Your point is in line with the group’s thinking, being that the best way to do this is use DR/DPE reference data to work it out. However, having the field as a backstop (and given we already have it) is felt to be helpful. We’ll capture all of that in a Recommended Practices document on trade reporting logic (to complement an earlier document on trade reporting formats).