Are Rolling Spot FX And Rolling Spot Precious Metals Reportable Under MiFIR?

TRAction often gets asked whether Rolling Spot FX and Spot Precious Metals are reportable under MiFIR. In this article, we explain why we consider that Rolling Spot FX and Spot Precious Metals are not reportable under MiFIR.

Financial instruments that are subject to MiFIR

Article 26 of MiFIR sets out the reporting obligations that apply where one of the following is traded, irrespective of whether or not such transactions are carried out on a Trading Venue:

1. financial instruments which are admitted to trading or Traded on a Trading Venue (ToTV) or for which a request for admission to trading has been made;
2. financial instruments where the underlying is a financial instrument traded on a Trading Venue; and
3. financial instruments where the underlying is an index or a basket composed of financial instruments traded on a Trading Venue.

Upcoming changes to Article 26: It should be noted that the MiFIR Review amends Article 26 and will, when it becomes operative, alter the scope of the transaction reporting obligation. Notably, the amended Article 26 introduces a carve-out for OTC derivatives other than those referred to in Article 8a(2) — those will only be reportable when carried out on a trading venue. Conversely, a new limb (d) brings OTC derivatives falling within Article 8a(2) into scope regardless of whether they are traded on a trading venue. However, the amended Article 26 will only apply once a revised version of RTS 22 enters into force. Until then, the existing Article 26 and the current RTS 22 continue to apply. The European Commission has confirmed it will not adopt amendments to RTS 22 before 1 October 2027.

Are OTC derivatives subject to MiFIR?

With regards to over-the-counter (OTC) derivatives, ESMA’s opinion is that “only OTC derivatives sharing the same reference data details as the derivatives traded on a trading venue should be considered to be ToTV, hence, subject to the MiFIR transparency requirements and to transaction reporting”.

Thus, if the instrument is ToTV but the transaction took place outside of the exchange (OTC derivatives), it will be reportable under MiFIR if it shares the same reference data as the instrument which is ToTV (except for the venue/issuer related fields).

This position will change when the amended Article 26 enters into force, at which point OTC derivatives (other than Article 8a(2) instruments) will only be reportable when executed on a trading venue, and the ToTV test as applied to OTC derivatives will fall away.

Traded on a Trading Venue

Following the launch of MiFID II, Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs) have been classified as Trading Venues, which has widened the scope for instruments that are ToTV and thus reportable under MiFIR.

Financial Instruments Reference Database System (FIRDS)

Drawing on our direct reporting experience and continuous monitoring of ESMA’s FIRDS database, we have reached the following conclusions:

Rolling Spot FX: Rolling Spot FX contracts offered by are not reportable under MiFIR. The rolling Spot FX instruments no longer appear in the FIRDS database under the ISINs provided by the two entities. As a result, we are unable to report these transactions as reporting results in receiving rejections from the regulators.

Therefore, even if the same reference data was shared between a CFD/FX broker and the venue, any OTC instruments based on these products would not be reportable.

The FCA has also stated in Market Watch 74:
“Spot FX instruments: We have identified trading venues submitting instrument reference data for spot FX instruments. Spot FX is not a financial instrument under the UK MiFID framework. The submission of reference data for spot FX instruments can therefore mislead investment firms as to the scope of their reporting obligations. This includes where they are traded as part of a complex trade or strategy. Trading venues should ensure reference data is not submitted to us for instruments that are not MiFID financial instruments.”

Spot Precious Metals: Spot precious metals are not, of themselves, financial instruments and are therefore not within the scope of MiFIR. However, derivatives on spot precious metals (such as CFDs referencing gold or silver) may be reportable if the relevant ISIN appears in FIRDS and the OTC instrument shares the same reference data as a ToTV derivative. Firms should conduct an ISIN check in FIRDS before concluding whether a reporting obligation arises for any specific precious metals derivative.

Does this apply to UK MiFIR as well as EU MiFIR?

UK MiFIR — the version onshored into UK law following Brexit — currently preserves a materially similar ToTV-based framework for transaction reporting. Firms should nonetheless note that the UK and EU regimes are increasingly diverging: the FCA is actively consulting on broader amendments to UK MiFIR transaction reporting which may further alter the scope of reportable instruments. Firms with obligations under both regimes should monitor FCA developments separately. TRAction can assist clients in assessing their obligations under either regime.

How can TRAction help?

TRAction closely monitors the regulatory reporting environment and ensures our clients stay compliant with their reporting obligations under MiFIR, MiFID II and other applicable regulatory regimes. If you would like to discuss further on this topic, please contact us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.