Reuters Quotes Christopher Poon on Possible Changes in Delegated Reporting

Akin Gump financial regulatory counsel Christopher Poon has been quoted in the Reuters article “Brokers would like to dump delegated reporting, may start to charge,” regarding a desire by some broker dealers to reduce or eliminate their European Market Infrastructure Regulation (EMIR)-related delegated trade reporting services.

The article reports that broker dealers began offering delegated reporting in 2013, but new requirements that kick in later this year will add to both the complexity and cost of doing so. Getting out of providing the service at this point, the article adds, will be difficult and some buy-side firms will depend on their brokers to get the new reporting requirements sorted out for them.

“The buy side has an expectation that it will be guided through the EMIR reporting changes by their brokers offering delegated reporting,” said Poon. “They have been preoccupied with other regulatory changes of late and are hoping for the sell side to do the leg work.”

But free delegated reporting could soon change, the article notes. The Markets in Financial Instruments Directive II will put an end to most inducements, which looks as if it will include delegated reporting.

“Looking at the draft FCA MiFID II rules it’s difficult to see how free EMIR reporting could fit into the list of minor non-monetary benefits that wouldn't be considered an inducement. There is the potential that managers won't be able to receive free reporting,” Poon said.