CME and Abide are shutting down their EU reporting operations. This is putting some real pressure on trading firms. As low-cost reporting destinations, CME and Abide were able to attract a large number of customers who will now have to switch. Here are some things to think about.

1. Shutdown is the end of November

The window for switching repositories is very small. A lot of staff are out on summer holiday though August and still distributed because of COVID 19, making coordination difficult. We’ve been talking about it quite a bit amongst our peers, and all signs point to a mad autumn dash to get reporting repointed. The caveat here is that CME/Abide must be involved and aligned with your new chosen repository to move your historical trades. It’s a recipe for a logjam.

2. Delegated Reporting: Read This Warning Label

Delegated reporting is the process in which  a firm prepares and submits reports on your behalf. These service firms can aggregate all their customers’ reports and send them to the trade repository.  In exchange, the trade repository offers these service firms lower prices.

Here’s what you should keep in mind when engaging a service firm:

• You will not have a direct relationship with the trade repository. That will not be a problem so long as everything goes as planned. But what happens if the delegated reporter goes out of business (this has happened)? Do you have a plan?
• How is your delegated reporter’s security? And, where is your trade data? Consider conducting a security audit and asking for penetration test results and their security plan. Any established firm should be able to provide this in short order.
• There are a large number of vendors trying to jump into this market because of the opportunity CME’s exit present. Delegated reporting firms have gone out of business before and it was a mess. There are a couple very well established firms that perform delegated reporting. If that’s your objective it’s advisable to stick with them.

3. In this case the destination is more important than the journey.

The worst part of the CME and Abide Shutdown is that the lowest cost vendor is exiting the market. What is your next best alternative? Right now, UnaVista is receiving the most attention. It is a similarly priced alternative with good technology. Back to point number one. It’s best to not wait.