On 7 October 2019, the European Securities and Markets Authority (ESMA) published an updated version of its Q&As on data reporting MIFIR.
The updated Q&As modify the answer to question 2 on transaction reporting concerning the representation of different national client identifiers for natural persons.
The updated Q&As also insert a new question and answer in section 17 on FX forward reporting under Articles 26 and 27 of MIFIR:
How should a transaction carried out on a trading venue on a FX forward be reported under Article 26 and Article 27 of MiFIR?
On March 13, 2018 investment firms A and B enter in a EUR/GBP (the currency mentioned first is the ‘base’ currency, while the other currency is the ‘terms’ or ‘quote’ currency) FX forward instrument on a trading venue. The instrument has the following characteristics:
- Notional of the instrument: €1M;
- Effective date of the transaction: March 15th 2018 (T+2);
- Expiry date of the instrument: September 15th 2018;
- The tenor of this instrument is 6 months;
- ISIN code of the financial instrument: EZ1234567891;
- The price of the instrument is the FX forward rate expressed as a price of base currency in the quoted currency according to the market convention for the currency pair; and
- The EUR/GBP FX forward rate reference is 0.8200.
The counterparty that is receiving the currency which is first when sorted alphabetically by ISO 4217 standard should be identified as the buyer.
In our example, investment firm A who will (in 6 months) deliver the GBP and receive the EUR is the buyer of the FX forward, while investment firm B who will (in 6 months) receive the GBP and deliver the EUR is the seller of the FX forward.