Hi, I am looking for opinions on this topic since I can’t find clear ESMA guidance.
I am wondering what post-trade transparency reporting obligation exists for trades (equities) that a buy-side firm executes via an execution-only broker. The broker acts as an agent providing execution-only services for trades received from this firm. These trades are executed by the broker on an EU regulated market (stock exchange).
One clients assumes that the trade reporting will be done by the regulated market and the broker will inform them about this by using tag 2524 in the FIX execution message? So that the buy-side firm doesn’t need to report any of the trades executed with these execution-only brokers to the APA. Regardless of the legal status (SI/non-SI) of the broker.
I am not sure that this interpretation is correct since the firm is still trading with the broker, not directly on venue. Also, this would be even more difficult if the broker executes on a non-EU venue since equivalency will not be easy to determine.
I think the determination of reporting obligation is through the SI status of the broker, regardless how the broker is ultimately executing.
Any opinions?
Thanks,
Gernot