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Why should banks and brokerage houses start focusing on the MiFID II Directive now?

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The works of a bank on iFID2/MiFIR – a new set of EU regulations the purpose of which is to ensure protection for investors, corporate governance, and market transparency – must be accelerated even now. As regards MiFID1, the reporting of events concerning securities and derivative transactions to a regulator shall take place in a new way and shall include, among other things, providing information, which has not been collected so far, with characteristics that are different from those in EMIR.

Dorota Anna Wróblewska’s comment on Special Report “Frontem do Klienta” (English: “Turned Toward the Client”) about the debt market in Poland. Miesięcznik Finansowy Bank, February, 2017

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It would be easier for banks to manage a portfolio of past-due receivables if dedicated IT tools were used. Currently the processes of packaging, managing, and offering receivables for sale are still ‘manual’ processes, ‘digitised’ only to a small degree, and consuming much of bank employees’ time and energy. One solution for many such problems could be a management system implemented or made available in various models.

Marcin Werner’s comment on Karol Materna’s article “Zdążyć przed MiFID2” (English: “How to Fulfil the MiFID2 Requirements on Time”), Miesięcznik Finansowy Bank, 03/2016

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Many MiFID II/MiFIR requirements shall have a significant impact on IT in the organisations, which are subject to those requirements. The requirement of transaction reporting to the Polish Financial Supervision Authority shall now also extend to instruments admitted to MTF and OTF, and, in the future, also IRS, FRA, and OIS transactions or the transactions in which the underlying instrument is admitted to the regulated market, MTF, or OTF. Therefore, it shall not be possible to do all the reporting in the manner in which it has been done so far, through the stock exchange. The amount of the transmitted information is increasing considerably and is not much less than in the EMIR reporting.

Reporting and derivatives transaction settlement. Risco Software systems for the realisation of the requirements of EMIR.

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Let us remember: Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR) introduces, among other things, the obligation to report derivatives transactions to repositories. The National Depository for Securities (Polish: Krajowy Depozyt Papierów Wartościowych, abbreviated to KDPW S.A.) has opened a trade repository, on November 2, 2012. The second phase of the regulation which, regarding banks, became effective in 2015, introduces the obligation to clear transactions with the use of the so-called “Central Counterparty” (“CCP”), i.e. to submit transactions to be cleared in CCP, whereas the party of a transaction concluded by, for example, two banks, is CCP (in Poland: KDPW_CCP). Cesarz, a proprietary system of the Risco Software Company, enables correct and automatic reporting of derivatives transactions to a repository and their clearing.