Risk Focus, a leading provider of Regulatory Trade Reporting solutions to the global capital markets, has engaged Kaizen Reporting, a leading regulatory reporting testing and compliance firm, to certify its forthcoming MiFIR Validation Module (MiFIR.Validate.Trade). Kaizen’s certification brings credibility to the solution, which will be ready for deployment by Q1 2016 - nearly a full year ahead of MiFID II implementation.
Existing clients of the Risk Focus G-20 (Group of 20) Validate.Trade service will soon be able to add the MiFIR module to test message integrity, content, format and adherence to the ESMA RTS requirements well ahead of User Acceptance Testing (UAT) with their chosen Approved Reporting Mechanisms (ARMs). Upfront investment in automated testing tools will allow firms to establish data quality baselines early in the delivery of their MiFID II/ MiFIR transaction reporting solutions.
“Since its roll-out in the third quarter of 2014, Validate.Trade has become a key component of many global banks’ swaps supervisory systems and automated testing infrastructure. It’s critical for us to work with leading MiFIR experts like Kaizen during our own development. There’s still a lot of work to be done for both us and the industry as a whole, but we plan to be ready to support our customers from Q1 2016,” said Brian Lynch, CEO of Risk Focus. “The sooner firms start validating trades and building out automated controls, the better prepared they will be to meet the MiFID II deadline.”
Kaizen CEO Dario Crispini said, “As testing specialists, Kaizen’s mission is to be the gold standard for regulatory reporting testing and compliance assurance. We are pleased we have been asked to work with RiskFocus to independently certify the Validate.Trade platform is MiFID II compliant. Real-time quality controls such as Validate.Trade can help firms meet their regulators’ expectations.”
The recent announcement from the DTCC Global Trade Repository (GTR) detailing its own MiFIR strategy ensures that GTR clients can use the same message interface to report their derivatives trades under both MiFIR and EMIR. This also means that clients of Risk Focus’s G20.Validate.Trade can easily add the MiFIR module to their existing processes with minimal integration work required.
Robust, automated testing and data validation tools will be critical to firms required to meet the new reporting requirements which will take effect in January 2017. Building these tools internally would be prohibitively expensive and would likely not meet their time to market demands.