Financial Markets: Timestamping Options for MiFID II Compliance

Posted by Mae Kowalke on Monday, April 18, 2016 with No comments

Under European Union rules (MiFID II) slated to come into force in 2018, financial services firms engaging in high frequency trading will be required to timestamp trades with 100 microsecond accuracy. While that might sound like a stretch, technology does exist to make such granular tagging possible and even feasible, noted QA Financial. 

A system capable of microsecond-accurate timestamping will, however, require constant monitoring and testing to ensure clocks used do not diverge from Universal Coordinated Time (UTC). Likely, that means synchronizing with GPS or high-precision atomic clocks. 

Currently, there is no vendor with a market-leading solution, QA Financial reported, and that's a good thing because it is creating competition that should result in more and better options for firms that need this technology. As of now, the field is open for test consultants and service providers competing for business. 

In the QA Financial report, Accedian market advisor Ian Salmon said there are basically two options for timestamping tools that meet MiFID II requirements:

  1. Timestamp using the firm's own servers
  2. Time-stamp at the firm-wide network level 

The second option is better, Salmon implied, because it doesn't require synchronizing all the various internal clocks used by various apps. 

Read the full QA Financial report for more details about the technology needed to comply with MiFID timestamping requirements. 


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