Is your MiFID firm getting flexible, unrestricted access to transaction report data in the ARM (Approved Reporting Mechanism)? Is your firm maximising the value or this data in order to boost business intelligence, trade monitoring and reporting?
Most MIFID firms report vast amounts of t+1 data to National Competent Authorities (NCA) on a daily basis under MiFID II. This data is generally sourced by the firm across multiple front office and order management platforms. The ARM is often the only central repository where this t+1 trade data is co-located across all the firm’s executing entities and jurisdictions.
This provides an incredibly rich data set that offers a unique view into cross-platform and cross-jurisdictional trading activity. When plugged into business intelligence tools, for instance, this data reveals insights into front and back office operations, trade monitoring, data quality and more – in addition to simply fulfilling MiFID II regulatory requirements.
So why aren’t MiFID firms maximising the value of this centralised trade data repository? The answer is that the vast majority of ARMs restrict firm’s access to this data. Data that is owned by the firm, itself.
Oftentimes, the ARM will archive the data after 6 months. In this case, historic transaction data can only be retrieved with additional data license costs. In other cases, the ARM won’t have the integration ability to publish the data back to the firm in an accessible or structured format. In limiting access and acting as a basic utility, many ARMs are depriving firms of the benefits they might realise through being able to analyse and redeploy their transaction reporting data.
In order to overcome these data access difficulties, MiFID firms sometimes engage with third party reporting aggregators, that are placed between the MiFID firm and the ARM. But this then adds an additional layer of third party outsourcing and management. This shouldn’t be required if the ARM actually enabled access to your data.
Unlocking access to data in your ARM
At AQMetrics, we realise it’s important for firms to be able to access their data. AQMetrics ARM is a software platform, designed from first principles to cleanse, augment and flow data to both upstream and downstream processes, wherever it is required.
Central to the platform design is the reuse of the golden data set for trade monitoring, risk assessment and compliance reporting. Rather than deploying data for a single task, AQMetrics actively encourages firms to maximise the use of their ARM data across multiple upstream and downstream processes.
Our clients are actively using daily .csv extracts and extendable APIs in the ARM to stream data to their business intelligence tools, where they can monitor trade execution activity, data quality and compliance effectiveness in real time.
Looking to the future
But simply providing flexible access to transaction reporting data isn’t the only solution AQMetrics offers as an ARM. At AQMetrics, we’re constantly thinking beyond our customers’ current business models in order to help them optimise their data for future use elsewhere in the firm.
AQMetrics data analysts are currently working with a number of tier 1 investment firm clients to discuss open formats which can be easily consumed. AQMetrics platform provides RESTful APIs which allow integration with our customers’ in-house business intelligence tools, such as Microsoft Power BI or Tableau. This allows our customers to have real time access to their own dashboards, fed by live data from the ARM. It’s a huge step forward.
With this API published data, AQMetrics allows firms to intelligently monitor for patterns in their trade data, performing time series analysis, shining a light on data quality and execution patterns month-on-month, year-on-year. Our customers are using this data-driven feedback to handle NCA queries, to perform inhouse data quality continuous improvement, and to implement alerting and monitoring systems.
Using the data in this extendable way allows for deeper monitoring in the front office, more efficient compliance reporting in the back office, and stronger audit and control overall.
Far from limiting our customer’s access to their own data, AQMetrics platform and technology enables greater insights and enhanced compliance. AQMetrics ARM acts as an extension of our customer’s business intelligence. Isn’t it time you asked more of your ARM?
In our next Q&A post, we’ll explain in much more detail how you can extend use your data – including your ARM data – in order to bolster your reporting and glean key business insights.