The regulatory reporting industry is constantly experiencing change. In 2020, this has included the start of new regulations (SFTR), Brexit implications and market end-point consolidation. In March, CME announced it would no longer be offering ARM, APA & Trade Repository services in Europe and Asia and now it has been confirmed that Deutsche Borse is withdrawing from the market through the sale of RRH to MarketAxess Trax which is already an end point for ARM and APA reporting. This has reduced the number of market players, with the inevitable effect of reduced competition in the short to medium term.
It’s not unlikely that pricing for Trade Reporting will continue to increase as a result of this reduced competition. Market participants may need to assess options for keeping costs as low as possible such as consolidating their trade reporting to single service providers to access the benefit of consistency and volumes. Using RegTech vendors to improve and automate the process to reduce the total cost of ownership may be an appealing option.
However, this consolidation is also an opportunity for other end-point players to increase their offering by providing services they don’t currently, such as MiFID transaction reporting. As these players explore opportunities to enter new markets, the market may benefit from new competition, enhanced service quality and the introduction of new technologies.
For existing Deutsche Borse clients, we expect the transition to be relatively smooth. There’s plenty of time – 18 months - to implement the change and only one regime (MiFID) is impacted. In addition, Deutsche Borse did not offer client customisation of services and as such, the transition is expected to be simpler.
