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Abide Financial Limited Regulatory Reporting For MiFID & EMIR November 2013. Agenda. Introduction to Abide Financial EMIR Positioning and status Abide Regulatory Reporting Services Engagement Approach Commercials. Abide Financial Limited. Founded in 2010

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Abide Financial Limited Regulatory Reporting For MiFID & EMIR November 2013


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    1. Abide Financial Limited Regulatory Reporting For MiFID & EMIR November 2013

    2. Agenda Introduction to Abide Financial EMIR Positioning and status Abide Regulatory Reporting Services Engagement Approach Commercials

    3. Abide Financial Limited • Founded in 2010 • 2011 – Built service and completed FCA approval for ARM • Capacity built and tested to 5m reports per day – 30% of avg. UK volume • 2012 / 13 Client acquisition – Over 1.5m Transaction Reports /day • Over 45 million back reports submitted • Summer 2012– Advisory services launched • Autumn 2012 – French Financial Transaction Tax service added to hub • Spring 2013 – General-purpose reconciliation service added to hub • June 3rd 2013 - Abide launches EMIR reporting service • September 17th 2013 – Regis-TR and Abide sign collaboration MOU • Acquisition of Transaction Reporting Limited to close March 1 2014

    4. Abide helps protect reporting compliance • Regulatory Environment is constantly evolving and becoming more complex

    5. Abide’s 5 Pillar model for service management

    6. Abide’s Regulatory Reporting Service Reporting Firm Reporting , Reconciliation and Exception Management Reports produced for MiFID Abide Hub & Value Added Services FCA Abide ARM Reports produced for EMIR ESMA Abide EMIR Reporting REGIS-TR PublicAccess

    7. Abide Platform Architecture Source handler metadata Business logic metadata Output / display metadata FCA I n g e s t o r JSON records V a l i d a t o r F S H a n d l e r FTT JSON records ARM DB JSON records JSON records TR FTT DB JSON records JSON records TR DB REMIT,DFA, Others Table storage Data sources RDB storage Security GUI

    8. Update on EMIR Status

    9. EMIR Timeline (As at revised on September 2013) 2014 2013 To 2017 07.11.13 12.02.14 12.02.14 Within 90 days 12.05.14 Within 3 years 12.02 .17 12.08 .14

    10. EMIR TR Reporting Requirements • All derivative transactions, their termination or modification, whether OTC or Exchange-Traded, are reportable • Once per day update on collateral and Mark to Market to be reported per trade (180 days after start of reporting) • There is no lower value threshold • There are no exclusions for FX, Commodities, Interest-Rate or Index-related derivatives • Transactions to be reported to a Trade Repository, CCP or authorised third party by T+1

    11. EMIR TR Reporting Requirements • Both counterparties report Counterparty Data Set (26 fields), only one needs to report Common Data Set of trade details (59 fields) • Each counterparty to a derivative contract is to ensure that the Common Data reported is agreed between both parties to the trade before submission to the TR • One counterparty can delegate the reporting of the contract to the other counterparty or to a third party in which case the third party submits one report on behalf of both counterparties • EMIR advise use of the UTI (Unique Trade Identifier ) to help with the reconciliation of the data (especially in the case that the counterparties are reporting to different trade repositories).

    12. EMIR Implementation Challenges No mechanism for data validation by TRs in EMIR Data standards (LEI, UTI, UPI etc) will not be ready in time for initial implementation – interim solutions are required Given the lack of a globally agreed UTI standard, it will be difficult for Counterparties to match and agree trade data prior to submission to a TR by T+1 Standards and operating procedures for managing interchanges, including reconciliations, between TRs are not defined and so it is also difficult for TRs to match unreconciled transactions EMIR designed initially for OTC transactions – ETDs are an after-thought and there has been a lack of clarity on their inclusion or otherwise for February start date No EMIR data extraction and enrichment tools widely available The day one legislation will continue to be refined as issues present themselves

    13. Abide’s EMIR Reporting Service Combined EMIR & MiFID reporting for all asset classes Abide has an alliance with REGIS-TR, but can use other TRs if demanded by the client Provide a seamless service and will own the timeline and TR reporting process. Reporting firm will have independent access to the TR to review reports submitted to the TR on its behalf Fully customisable service - all aspects

    14. Abide’s EMIR Reporting Service Perform delegated reporting for both counterparties and assist with matching unreconciled data Extensive validation to ensure good quality data reaches the TR Work around processes for UPI, LEI , UTI Issuing the UTI for use by both counterparties Back reporting to 16/8/12 free of charge until reporting start date Daily valuation and collateral reporting Regular reconciliation between TR, Abide and reporting firm’s trade data

    15. The Abide Regulatory Reporting Process • Tailored Service Management

    16. The Abide Data Extraction Process • Abide deploys it’s HUB • Any format • Multi system • We receive sample data from each client system • We engineer data compatibility with TransacPort • Complete internal testing • Test EMIR data into TR database – can use back load data for this purpose • Test MiFID date with FCA test system • Extraction of MiFID / EMIR data

    17. The Abide Validation Process • FCA Specs require extensive validation which Abide carries out and proactively addresses with the Client prior to submission • EMIR Specs don’t call for extensive validation – but we have mirrored our successful MiFID validations approach for EMIR • Abide carry out additional Validations on both to warn our Clients of any issues – Reports still submitted but validation warnings made available; for example • For MiFID - reports which although passing FCA validation are not compliant with TRUP3 • ISIN and Aii Validation failures against reference data • Reporting of default times • Reports outside of T+1 • Incorrect use of FRNs or Internal references when BICs are available • Incorrect combinations of fields • Validation • FCA Validations • Abide enhanced validations • Intelligent warnings

    18. The Abide Exception Management Process Alert frequency, content and recipients completely customisable Automated emails at each stage of the process File receipt Extraction Validation Exception management FCA Liaison Client selects extent of self serve / management GUI - Customisable access / views and functionality https://transacport.abide-financial.com/?clientid=demo Customisable management information • Tailored • Proactive • System led • Exception management approach

    19. The Abide Reporting & Reconciliation Process • Once as many validation issues as possible have been dealt with inside the T+1 window, Abide processes the data into the FCA / TR formats and submits the Reports • Abide proactively manages any rejections with the Client • Abide produces a three way reconciliation (TR or FCA /TransacPort /Reporting Firm’s Data) • Reconciliations can be right the way to the front office • Additional sources can be added • Submission and reporting • Tailored • FCA Liaison • Reporting • Reconciliation

    20. Preparation for EMIR Reporting • Significant effort should now be focused on defining the internal business, process and system changes needed to meet the technical specifications for the EMIR reporting architecture. • Building and testing the new reporting solution – ensure capture of the 85 EMIR fields • Work out processes for matching trade data with counterparties prior to submission • Merge with MiFID reporting fields • Assume ETDs included until firm decision by ESMA and European Commission • Review BAU procedures to ensure capture of new data items (such as MTM, collateral, confirmation time stamps etc). • Back-load any trades which were outstanding on 16th August 2012 and are still open • Test the new reporting solutions (i.e. run test data through validations and into a TR) START NOW (if not already started) !

    21. Engagement - typical approach Typically 4 to 8 weeks for MiFID EMIR Estimated – 12-16 weeks * * Due to the nearing reporting start deadline, Abide will agree a phased implementation programme to insure reporting begins, and then develop the bespoke elements of the service at the earliest opportunity

    22. Abide Benefits - USP • Dual reporting to Regis-TR • Independent, no exchange tie or influences • Multiple services possible driven from singe data source • One of the few firms that can apply ARM experience to EMIR • The tailored approach to the deployed service will be expanded • Abide will isolate Clients from expected changes to regulations post regulation launch • Our advisory service will be available to help practically interpret the new regulations

    23. Commercials • Abide’s objective is to offer more functionality, much higher levels of care, attention, service and equal or better quality at a reduced price compared to our competition. • Abide will deliver a bespoke quotation based on the individual reporting firm’s situation