Data Quality: MiFIR transaction reporting (article 26 of MiFIR) – Fields related to the identification of retail investors

The AMF reminds investment firm of the rules for the identification of retail investors in transaction reports, in accordance with Article 26 of Regulation (EU) 600/2014 (MiFIR).

The AMF is to carry out a campaign to verify the quality of the data in the fields relating to retail investors in transaction reports, and requests for remedial action will be sent to the reporters with the most problems. In this context, the AMF draws  attention to the following rules on the completion of the investor fields defined by Delegated Regulation (EU) 2017/590 and the ESMA Guidance (ESMA/2016/1452), hereinafter the "Delegated Regulation" and the "Guidance".

Compliance with these rules is crucial for the AMF to make effective use of this data in its mission to protect investors. The AMF therefore expects investment firms to strengthen their own control systems in order to improve the quality of information transmitted to the regulator.

Article 15 of the Delegated Regulation stipulates that "investment firms shall have arrangements in place to ensure that their transaction reports are complete and accurate. Those arrangements shall include testing of their reporting process and regular reconciliation of their front-office trading records against data samples provided to them by their competent authorities to that effect".

Name prefixes are excluded, and forenames and surnames of less than five characters must be completed with "#" symbols so that the forenames and surnames shown contain five characters. All characters are in capitals. The use of apostrophes, accents, hyphens, punctuation marks or spaces is prohibited.

For the purpose of constructing the CONCAT, the following four-step method should be applied:

1. Obtaining the first name and surname

To minimise the risk of difference in spelling or use of abbreviations, the Investment Firm should ensure that the spelling of the person’s full name is correct. Any use of short forms and abbreviations is not allowed.

2. Removing titles

Any prefixes to the names that denote titles, position, profession or academic qualifications, are to be removed. This includes, but is not limited to the following list; this list is not case sensitive: atty, coach, dame, dr, fr, gov, honorable, madam(e), maid, master, miss, monsieur, mr, mrs, ms, mx, ofc, ph.d, pres, prof, rev, sir.

3. Removing prefixes

Any prefix relating to the surname in the following list must be deleted and is not case-sensitive : am, auf, auf dem, aus der, d, da, de, de l’, del, de la, de le, di, do, dos, du, im, la, le, mac, mc, mhac, mhíc, mhic giolla, mic, ni, ní, níc, o, ó, ua, ui, uí, van, van de, van den, van der, vom, von, von dem, von den, von der.

Prefixes to surnames that are not included above, or prefixes attached to the name, i.e. McDonald, MacChrystal, O'Brian, O'Neal, should not be removed; but note that the apostrophes will be removed in the next step. The above list is not case sensitive.

4. Transliteration of apostrophes, accents, hyphens, spaces and other similar characters 

The following transliteration table must be applied, character by character, to the first name and surname. Generally described, the transliteration leaves any English A-Z or a-z character untouched and removes all the diacritics, apostrophes, hyphens, punctuation marks and spaces.

The following table maps a single input character to a single output character. This table should be applied to first name and surname prior to obtaining the five first characters, as specified in Article 6(4) of Commission Delegated Regulation (EU) 2017/590.

For any names that are written in Cyrillic, Greek or any other non-Latin alphabet, and where no Latin form is present, a transliterated English version of the name should be applied using that alphabet's conventions.

Below are some examples of how the CONCAT code is constructed:

First name(s) and surname (s) of buyer and seller (fields 9-10 and 18-19)

REMINDER OF APPLICABLE REGULATIONS

In order to fill in all the fields requiring the "First name(s)" (fields 9 and 18) or "Surname(s)" (fields 10 and 19) of the transaction reports, only the first step ("Obtain first name and surname") and the second step ("Delete titles") of the previous method should be applied. Transliteration thus is not applicable, and prefixes are not to be removed. Any characters in use by an EU country, including diacritic variants, may be used. All letters in the prefixes, names and surnames should be capitalised.

Date of birth of buyer and seller (fields 11 and 20)

Inheritance, succession, gifts and transfer of securities

REMINDER OF APPLICABLE REGULATIONS

• Point 5.20 of the Guidelines specifies the rules applicable to transfers of securities between clients, in particular that such transactions must not include a price when no price is paid.
• Transfers from an account held by a client to a joint account where the client is one of the joint holders is reportable. Likewise, it is reportable when a joint account changes into an account with only one owner. This principle also applies to transfers from joint portfolios to sole portfolios, distributions from trusts to beneficiaries, transfers from parents holding accounts for minors when the minors reach majority, transfers (or sales back) to a company name owned by an individual from said individual, transfers to charity and resulting from auctions or from an Investment Firm matching a buyer with a seller.
• Transfers in relation to movements involved in managing a probate for a deceased client or inheritances, auctions or gifts are all reportable since these transactions constitute acquisitions and disposals where a change of ownership occurs, even though there is no price, including the change of ownership of a securities account from one beneficiary to another.
• For transactions arising from probate relating to deceased clients or estates, the deceased must be declared to be the seller and the deceased is considered to be the decision-maker. For this reason, the fields in the transaction reports relating to the person responsible for the decision (fields 12 to 15 and 21 to 24), which are intended to identify persons acting in a representative capacity, should not be completed. When a party inherits financial instruments, said party must be reported as the buyer, and similarly, the transaction report fields relating to the decision maker must not be completed.
• The price field (field 33) of transaction reports must indicate the price paid, even if this is different from the market price. If financial instruments are transferred but no price is paid (e.g. in the case of donations or transfers between funds/portfolios), the price field must be filled with "NOAP".
• For example, if Client A wishes to transfer instruments to Client B's account, but does not receive payment. There are no fees/commissions. Both accounts are held with the same investment firm (firm X), which executes the transfer. Company X declares:

• The date and time to be reported are those on which investment firm X carried out the transfer.

• Say for example, Client A wants to transfer financial instruments from its account held with Investment Firm X to Client B's account held with another investment firm, Firm Y. Client A's instructions are provided to Investment Firm X and executed on 2018-10-05 at 09:53:17. Investment firm X does not know the identity of the client of investment firm Y, and vice versa.

Inconsistent reporting schemes