Financial Instruments Reference Data System (FIRDS)
European Union Electricity Market Glossary

 


 

 

Financial Instruments Reference Data System ('FIRDS') is a data collection infrastructure established by the European Securities and Markets Authority (ESMA), in cooperation with the EU competent national authorities (NCAs), in order to collect data in an efficient and harmonised manner.

 

FIRDS will need to cover the entire range of financial instruments that are included in the increased scope of MiFID II.

 

In accomplishing this task, FIRDS will necessitate linking of data feeds between ESMA, NCAs and around 300 trading venues across the European Union.

 

The new framework introduced by Regulation (EU) No 600/2014 and Directive 2014/65/EU requires trading venues and systematic internalisers to provide competent authorities with financial instrument reference data that describe - in a uniform manner - the characteristics of every financial instrument subject to that Directive.

 

 

"As I hope you will have heard by now, ESMA will provide a central facility in relation to reference and trading data and the calculation of the comprehensive MiFIR transparency parameters. This project has been made possible by the delegation of these tasks by national competent authorities to ESMA and it is the first time that such comprehensive tasks have been delegated to a European Supervisory Authority. Work on this major project, which requires ESMA to connect to hundreds of trading venues across Europe, is on track and is planned to go live in time with the application of MiFID in 2018. This project will allow us to collect data in a more efficient and harmonised manner across Europe, thereby achieving important economies of scale and lowering costs for industry and taxpayers, and publish all transparency parameters and reference data on financial instruments in a one-stop shop."

 

Verena Ross, Executive Director at the European Securities and Markets Authority (ESMA), The road to MiFID II – key note speech, City week 2016: "Towards a New Era of Innovation and Competitiveness" – 9 May, 2016, The Kia Oval, London, ESMA/2016/734)

 

Those data are also used for other purposes, for instance for the calculation of transparency and liquidity thresholds as well as for positions reporting of commodity derivatives.


In order to collect data in an efficient and harmonised manner, a new data collection infrastructure is being developed.

 

The absence of the data collection infrastructures has implications across the entire scope of Regulation (EU) No 600/2014 and Directive 2014/65/EU.

 

FIRDS will be used, among others, for:

 

- Without data it will not be feasible to establish a precise delineation of financial instruments that fall within the scope of the new framework.

 

- It will not be possible to tailor the pre-trade and post-trade transparency rules, in order to determine which instruments are liquid and when waivers or deferred publication should be granted.

 

- Absent the data, trading venues and investment firms will not be able to report executed transactions to competent authorities.

 

 

"ESMA is running a project (FIRDS) to centralise the collection of reference data according to the Regulation and to collect it directly from venues by delegation of 21 NCAs . This requires direct connection to around 100 trading venues (and another 200 through NCAs) and the construction of a system to collect and process more than 15 million instruments (compared to only Regulated Markets and with just one tenth of the number of instruments in the current reference data system)."

 

ESMA's Note of 2 October 2015 on MIFID/MIFIR implementation: delays in the go-live date of certain MiFID provisions, ESMA/2015/1514, p. 3

 

- In the absence of position reporting for commodity derivatives it will be difficult to enforce position limits on such contracts.

 

- With no position reporting, there is a limited ability to effectively detect breaches of the positon limits.

 

- Many of the requirements in relation to algorithmic trading are also dependent on data.

 

- The absence of data collection infrastructures will also make it difficult for investment firms to apply best execution rules.

 

- Trading venues and systematic internalises will not be able to publish data relating to the quality of execution of transactions on those venues. Investment firms will not be provided with important execution data to help them determine the best way to execute client orders.

 

Verena Ross, ESMA's Executive Director, has underlined the significance of the FIRDS infrastructure the following way:

 

"In one area we are entering completely new ground to improve data quality. In the context of the MiFID II implementation, national competent authorities (including the Norwegian FSA) have delegated to ESMA for the first time two major data related IT projects (which are legally under MiFID a national competence). ESMA will provide a central facility in relation to reference and trading data and the calculation of the comprehensive MiFIR transparency parameters. This project will allow us to collect data in a more efficient and harmonised manner across Europe, thereby achieving important economies of scale and lowering costs for industry and taxpayers, and publish all transparency parameters and reference data on financial instruments in a one-stop shop" (Regulatory and supervisory developments, the challenges ahead – a European perspective, Finanstilsynet 30th Anniversary International Conference Oslo, 20 October 2016, ESMA/2016/1497, p. 6, 7). 

 

  

 

Recitals 4-10 and 15 of the Regulation (EU) 2016/1033 of the European Parliament and of the Council of 23 June 2016 amending Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 909/2014 on improving securities settlement in the European Union and on central securities depositories

 

 

(4) In order to collect data in an efficient and harmonised manner, a new data collection infrastructure, the Financial Instruments Reference Data System ('FIRDS'), is being developed by the European Securities and Markets Authority ('ESMA') in conjunction with national competent authorities ('NCAs'). FIRDS will cover a wide range of financial instruments brought into the scope of Regulation (EU) No 600/2014 and it will link data feeds between ESMA, NCAs and trading venues across the Union. The vast majority of the new IT-systems underpinning FIRDS will need to be built from scratch, based on new parameters.

 

(5) Given the complexity of the new legal framework and the need for a very high number of delegated and implementing acts, the date of applicability of Regulation (EU) No 600/2014 was deferred by 30 months from the date of entry into force. Despite this unusually long period, stakeholders, such as trading platforms, NCAs and ESMA are not in a position to ensure that the necessary data collection infrastructures will be in place and become operational by 3 January 2017. This is due to the size and complexity of the data needed to be collected and processed for the new legal framework to become operational, in particular for transaction reporting, transparency calculations and the reporting of positions in commodity derivatives.

 

(6) The absence of the necessary data collection infrastructures would have implications across the entire scope of the new legal framework. Without data, it would not be feasible to establish a precise delineation of financial instruments that fall within the scope of the new legal framework. Furthermore, it would not be possible to tailor the pre-trade and post-trade transparency rules, in order to determine which instruments are liquid and when waivers or deferred publication should be granted.

 

(7) In the absence of the necessary data collection infrastructures, trading venues and investment firms would not be able to report executed transactions to competent authorities. In the absence of reporting of positions in commodity derivatives, it would be difficult to enforce position limits on such commodity derivatives. With no position reporting, there would be limited ability to effectively detect breaches of the position limits. Many of the requirements in relation to algorithmic trading are also dependent on data.

 

(8) The absence of the necessary data collection infrastructures would also make it difficult for investment firms to apply best execution rules. Trading venues and systematic internalisers would not be able to publish data relating to the quality of execution of transactions on those venues. Investment firms would not be provided with important execution data to help them determine the best way to execute client orders.

 

(9) In order to ensure legal certainty and avoid potential market disruption, it is necessary and justified to take urgent action to defer the entry into application of the new legal framework in its entirety, including all delegated and implementing acts adopted thereunder.

 

(10) The implementation process for the data collection infrastructures involves five steps: business requirements, specifications, development, testing and deployment. ESMA estimates that those steps will be completed by January 2018, provided that there is legal certainty on the final requirements under the relevant regulatory technical standards by June 2016.

 

...

 

(15) Regulation (EU) No 596/2014 of the European Parliament and of the Council establishes requirements regarding the collection of financial instrument reference data. Those data, that are collected via FIRDS, are used to determine the financial instruments that fall within the scope of Regulation (EU) No 596/2014. Regulation (EU) No 596/2014 applies from 3 July 2016. However, FIRDS will not be fully operational before January 2018. It is therefore appropriate to defer the date of application of Article 4(2) and (3) of Regulation (EU) No 596/2014 until 3 January 2018.

 

 

 

 

 

 

 

 

IMG 0744

    Documentation    




 

 

ESMA launches key MiFID II and MAR financial instruments database, 16 October 2017

 

Financial Instruments Reference Data System (FIRDS) Instructions on access and download of full and delta reference data files, 6 October 2017, ESMA65-8-5014

 

Commission Delegated Regulation (EU) 2017/585 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the data standards and formats for financial instrument reference data and technical measures in relation to arrangements to be made by the European Securities and Markets Authority and competent authorities, OJ L 87, 31.3.2017, p. 368–381

 

Launch of reference data submission under Article 4(1) of Regulation (EU) No 596/2014 on market abuse (MAR), 30 May 2017, ESMA70-145-10330 May 2017, ESMA70-145-103

 

Reporting Instructions, FIRDS Transparency System, 26 October 2016, ESMA/2016/1523

 

Reporting Instructions, FIRDS Reference Data System, 26 October 2016, ESMA/2016/1522

 

 

 

 

 

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    Links    

 

 

 

 

 

ESMA database: Financial Instruments Reference Data System (FIRDS)

 

Financial Istruments Reference Files

 

 

 

 

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Comments (3)
3 Thursday, 23 March 2017 11:34
Ben
Thanks for the usefule recap.

Do you know if the consolidated reference data in FIRDS (that ESMA will provide to NCAs) will be accessible to the rest of the industry for their own use ?
If yes, have any details been released ? (how to get it, which format, etc. ?)
2 Friday, 08 July 2016 19:23
Michal
ESMA
1 Thursday, 19 May 2016 13:00
Stephen Fowler
Re FIRDS - MiFID 2

"In order to collect data in an efficient and harmonised manner, a new data collection infrastructure is being developed."

Who is managing the development to implement FIRDS?

Stephen Fowler
Director
Global Analysis Limited
+44(0)77 11 965 643

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Last Updated on Wednesday, 18 October 2017 11:02
 

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