|Approved publication arrangement (APA)|
|Internal Electricity Market Glossary|
Page 1 of 4
Approved publication arrangement (APA) means a person authorised under the provisions established in the MIFID II Directive to provide the service of publishing trade reports on behalf of investment firms (Article (4)(1)(52) MiFID II).
APAs are designed to provide services to an investment firm in order for it to meet its obligations under Articles 20 and 21 MiFIR.
Article 20 MiFIR states that, "investment firms which, either on own account or on behalf of clients, conclude transactions in shares, depositary receipts, ETFs, certificates and other similar financial instruments traded on a trading venue, shall make public the volume and price of those transactions and the time at which they were concluded. That information shall be made public through an APA".
A similar obligation is placed on investment firms in relation to bonds, structured finance products, emission allowances and derivatives traded on a trading venue in Article 21 MiFIR.
The APA is required to have adequate policies and arrangement in place to make public the information required under Articles 20 and 21 MiFIR as close to real time as is "technically possible" on a "reasonable commercial basis" (the latter term to be clarified by the European Commission delegated acts).
The information shall be made available free of charge 15 minutes after the APA has published it.
The home Member State must require the APA to be able to efficiently and consistently disseminate such information in a way that ensures fast access to the information, on a non-discriminatory basis and in a format that facilitates the consolidation of the information with similar data from other sources.
The information made public by an APA is required to include, at least, the following details (Article 64(2) MiFID):
(a) the identifier of the financial instrument;
(b) the price at which the transaction was concluded;
(c) the volume of the transaction;
(d) the time of the transaction;
(e) the time the transaction was reported;
(f) the price notation of the transaction;
(h) if applicable, an indicator that the transaction was subject to specific conditions.
Authorisation and organisational requirements for APA's
There are separate but similar authorisation and organisational requirements for providers of data services (APAs, ARMs, and CTPs).
The rules focus on ensuring the integrity and security of the data these entities will handle.
Commission Delegated Regulation of 2.6.2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards on the authorization, organisational requirements and the publication of transactions for data reporting services providers specifies the data publication requirements applicable to APAs (and CTPs), and in particular:
- rules on authorisation, including the information on organisation and corporate governance;
- organisational requirements, including conflict-of-interest rules, outsourcing, and business continuity, testing and capacity, security and management of incomplete or potentially erroneous data;
- as regards provisions on publication arrangements, the provisions cover machine readability, provisions on scope of data and rules to avoid data duplication and non-discriminatory publication.
What is the difference between APAs and ARMs? APAs are firms who make public the details of transactions in financial instruments, while ARMs stand for firms who report the details of transactions to regulators for the purposes of market abuse surveillance.
In other words, both business vehicles: APAs as well as ARMs are designed to provide services to an investment firm in order for it to meet its obligations under MiFIR, but the respective MiFIR obligations for APAs are Articles 20 and 21, whereas the purpose of ARMs is to provide services enabling reporting obligations under Article 26 MiFIR.
There are also operational differences: whereas APAs and ARMs both are required to check investment firms' submissions for errors as well as to request resubmission if there are any issues, it appears that delegation to APAs takes responsibility away from investment firms while delegation to ARM does not (see: Norton Rose, MiFID II / MiFIR: Your Survival Guide Market Structures – Tying it All Together, p. 21).
Another difference is that APAs are under the obligation to disseminate information efficiently and consistently in a way that ensures fast access on a non-discriminatory basis in a format that facilitates consolidation from other sources, while ARMs have no regulatory duties to facilitate consolidation of data from other sources.
Investment firms making public their transactions through more than one APA
Details to be published by APAs
Details to be published by APAs are specified in Article 18 of the aforementioned Commission Delegated Regulation of 2.6.2016.
Pursuant to the said provision an APA shall make public:
(a) for transactions executed in respect of shares, depositary receipts, ETFs, certificates and other similar financial instruments, the details of a transaction specified in Table 2 of Annex I to Commission Delegated Regulation (EU) 2017/587 of 14.7.2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser and use the appropriate flags listed in Table 3 of Annex I to the said Regulation;
(b) for transactions executed in respect of bonds, structured finance products, emission allowances and derivatives the details of a transaction specified in Table 1 of Annex II to Commission Delegated Regulation (EU) 2017/583 of 14.7.2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives and use the appropriate flags listed in Table 2 of Annex II to the said Regulation.
Where publishing information on when the transaction was reported, an APA must include the date and time, up to the second, it publishes the transaction.
An APA that publishes information regarding a transaction executed on an electronic system must include the date and time, up to the millisecond, of the publication of that transaction in its trade report.
An 'electronic system' is understood in this context as a system where orders are electronically tradable or where orders are tradable outside the system provided that they are advertised through the given system.
Timestamps referred to above must, respectively, not diverge by more than one second or millisecond from the Coordinated Universal Time (UTC) issued and maintained by one of the timing centres listed in the latest Bureau International des Poids et Mesures (BIPM) Annual Report on Time Activities.
APA must ensure that the information, which has to be made public, is sent through all distribution channels at the same time, including when the information is made public as close to real time as technically possible or 15 minutes after the first publication.
Cancellation and amendments in trade reports
An APA is required to set up and maintain appropriate arrangements to identify on receipt trade reports that are incomplete or contain information that is likely to be erroneous.
APA's participation in the portfolio compression process
APAs are also envisioned to play a role in the portfolio compression.
It is the matter of Article 18 Commission Delegated Regulation (EU) of 18.5.2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions (see box below), which provides for some publication requirements for each portfolio compression cycle performed by investment firms and market operators.
Information to be made public through the APA (as close to real-time as is technically possible and no later than the close of the following business day after a compression proposal becomes legally binding) includes:
(a) a list of derivatives submitted for inclusion in the portfolio compression,
(b) a list of derivatives replacing the terminated derivatives,
(c) a list of derivatives changed or terminated as a result of the portfolio compression,
(d) the number of derivatives and their value expressed in terms of notional amount.
The information referred to above must be disaggregated per type of derivative and per currency.
|Last Updated on Sunday, 21 May 2017 16:59|