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Transaction Reporting Framework for MiFID

Challenges we address

The Markets in Financial Instruments Directive II (MiFID II) legislation published by the European Commission in October 2011  requires that global financial institutions periodically review and report on their processes and business operations — a move that has dramatically changed these institutions’ operating models and financial transaction services. MiFID transaction reporting is a challenging task that involves handling diverse securities transactions and business processes within a bank, generally occurring across a multitude of applications spread across many systems, and each with its own processing rules. Organizations need services that allow them to reuse and combine the functionality embedded in their existing applications with new functionalities to deliver composite applications that meet MiFID requirements. This would entail defining a business-process-management framework that defines new, end-to-end processes with business functions encapsulated in the services, rather than trying to customize applications. More importantly, given that the MiFID directive is evolving, and new rules and regulations are likely to be introduced, financial transaction services must be agile and robust.

HCL’s Transaction Reporting Framework

Our SOA-based enterprise architecture is helping global financial institutions meet MiFID II reporting requirements. It is a framework that is delivering agile and flexible solutions that address the ever-changing needs of the business. An abstract view depicts it as a layered architecture of loosely coupled services that align with business processes. This clear separation of concerns provides the unprecedented flexibility to plug in new services or to upgrade existing ones. It can also help expose existing enterprise applications as services, thereby safeguarding IT infrastructure investments. The business process flows are supported by the choreography of these exposed services into composite applications integrated through an Enterprise Service Bus (ESB).

HCL Transaction Reporting Framework for MiFID

The Framework’s key features:

  • A data-filtering mechanism for cleansing trade data obtained from multiple systems and financial transactions. This helps add instrument classes from various trade data systems, and handle feeds from source systems - both in batch and real time modes.
  • A rules engine picks up the right trades for transaction reporting to ensure transparency in the application of business rules, along with mechanisms to view the processing logic and rules that were applied
  • A single flexible gateway for external connectivity to reporting mechanisms or direct regulatory reporting
  • Standard messaging formats for external notifications
  • Robust  infrastructure with a best-of-breed rules engine and servers with secondary standby capacity
  • Scalable infrastructure to handle volume spikes and separation of databases by business services
  • Business process performance monitoring through a dashboard that includes measuring and generating management reports. Key aspects considered around financial transaction services include accuracy, throughput, time taken, outage, and number of errors
  • Services that can easily be shared across applications

What you can expect

  • A modular approach to transaction reporting – easily adding various instruments and reporting mechanisms
  • A consolidated engine that handles all types of financial transactions and reporting requirements
  • Business rules centralization - from a transaction reporting perspective
  • Improved understanding and operation of the entire reporting framework through an uncomplicated management console
  • The ability to cater to increased business volumes

Case Studies

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