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The impact of inaccurate instrument reference data on MiFIR reporting

Written by Michael Channing

The impact of inaccurate instrument reference data on MiFIR reporting

The FCA’s latest Market Watch newsletter discusses the completeness and accuracy of instrument reference data (IRD) under RTS 23 of MiFIR. In particular, this issue relates to:

  • Recognised Investment Exchanges (RIEs)
  • Multilateral Trading Facilities (MTFs)
  • Organised trading facilities (OTFs)
  • Systematic internalisers (SIs)


RTS 23 is a regulatory technical standard implemented as part of the MiFIR transaction reporting regime which states that the firm types listed above are required to report reference data for instruments traded on their venues and/or trading platforms. These reports are issued to National Competent Authorities (NCAs) on a daily basis.

The driving force behind the implementation of this RTS was to improve standardisation and consistency of transaction reports submitted by MiFIR reporting firms in accordance with RTS 22. The IRD submitted by trading venue operators and systematic internalisers is intended to validate and supplement the transaction reports received by the FCA, thereby improving their ability to monitor markets effectively.

In this edition of Market Watch, the FCA has expressed concern at the accuracy of IRD being submitted, and the consequent loss of oversight that this is causing.

Data quality

In response to these observed issues, the regulator emphasises the importance of data quality processes to ensure the accuracy of IRD. They state “IRD submitting entities must have methods and arrangements to identify incomplete or inaccurate data and report data in a timely manner”, continuing that “these processes should not be limited to rejections and warnings received.”

In particular, the FCA noted issues with invalid legal entity identifiers (LEIs) and Market Identifier Codes (MIC), inconsistent maturity dates and trade dates, and duplicate records. An overview of the ten most common rejection types can be found here.

Exception management

Beyond the quality of the data itself, an overarching theme of insufficient processes around exception handling becomes apparent . The regulator raises concern around the handling of IRD submissions which have been rejected, stating that “some firms are repeatedly submitting identical records after receiving a rejection message,” indicating that most IRD submitting entities do not have proper controls in place to review and resubmit inaccurate IRD.

One instance of such mishandling of exceptions is the cancellation of erroneous IRD records. The regulator states that “if an entity submits IRD to us in error, they should cancel it” in FCA FIRDS. However, despite this, they claim that only 23 IRD submitting entities have cancelled records since March 2022, indicating that the vast majority of IRD submitting entities have not used this functionality. This process of cancellation is vital to maintaining the accuracy of IRD and transaction reports submitted under MiFIR.

On the point of handling inaccurate IRD, the newsletter emphasises that trading venues and systematic internalisers are required to “notify [the regulator] promptly when they identify IRD that is incomplete or inaccurate.” Since 2018, only 135 breach notification forms have been submitted, again leading to concerns that IRD submitting entities are not using this functionality.

Beyond this, they also express concern at the use of dummy data in certain fields, in particular:

  • Instrument classification
  • Name of index/benchmark of a floating bond
  • Identifier of the index/benchmark of a floating rate bond

The newsletter stresses that dummy data should not be used, and that firms must implement processes to ensure that their IRD submissions are complete and accurate instead.

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