Transaction reporting

[ESMA 70-1861941480-56 MiFIR data reporting Q&A, Q&A 24.7] Consider the following example, where Banks A, B and Firm Z are investment firms: Client has a portfolio at Bank B. The client is a German national, Max Mustermann. His date of birth is 01/04/1974. Bank B has outsourced the portfolio management (discretionary mandate) to Firm Z, which is an investment firm undertaking portfolio management. Firm Z sends a purchase order to Bank A for execution without meeting the conditions for transmission under article 4 of Commission Delegated Regulation (EU) 2017/590. Firm Z is acting in an ‘any other’ trading capacity. Firm Z does not have a contract with the Client. Bank A executes the order on a Trading Venue. Bank A transfers the financial instruments from its own account to the account of Bank B just for settlement purposes. Bank B books the financial instruments from its account into the account of the Client. Bank A and Bank B are acting in an own account trading capacity The reports by Bank A and Bank B will be as follows: Bank A is receiving instructions from Firm Z without the transmission requirements being met so it will report Firm Z as the buyer in its client side report. Bank B’s counterparty for execution purposes is Firm Z and since Bank B has not met the transmission conditions it will report its client as the buyer and itself, Bank B, as the seller.  Bank B has outsourced the discretionary management for its client to Firm Z so there is a power of representation. However, field 12 is only populated where the decision is made under a power of representation and the buyer is a client of the executing entity. Therefore field 12 is only populated in Report 2 of Bank B, since in Report 1 Bank B is itself the buyer. Even though Firm Z is making the investment decision on behalf of Firm B, field 57 is a mandatory field where a firm is acting in an own account trading capacity since the firm is accepting the risk. Therefore this should be populated with the algo or person in Bank B that is primarily responsible for the decision to delegate. Field 59 is a mandatory field but where the execution decision is made outside the firm it is populated with ‘NORE’. In this scenario the execution decision is being made by Firm Z as it is deciding when and how to execute (by sending orders to Firm A) and therefore this field is populated with ‘NORE’ in Bank B’s reports .  Reporting by Firm Z Firm Z is acting on behalf of Bank B and since Bank B has not met the transmission conditions it will report Bank B as the buyer and Bank A as the seller.  Firm Z is making an investment decision on behalf of Bank B so it will populate field 12 with its LEI and will populate field 57 with the algo or national ID of the person responsible for the investment decision within the firm. Bank A and Bank B are acting in any other trading capacity and Bank B is not meeting the conditions for transmission under article 4 of the Commission Delegated Regulation (EU) 2017/590. Since the buyer in Bank B’s report is its client and there is a power of representation field 12 is populated with the LEI of Firm Z in Bank B’s report. Since the execution decision is made outside the firm (being made by Firm Z) field 59 is populated with ‘NORE’ in Bank B’s report.