The MarketsListedIn Property
The MarketsListedIn property lists all the different exchanges on which an instrument is listed by their 4 letter segment MIC level (see the ISO MIC FAQ under "MIC LEVELS" for details) and is vital to the running of a significant proportion of FundApps' rules. In fact, at least 186 rules use the MarketsListedIn values of an instrument in order to determine whether an instrument is disclosable.
How does MarketsListedIn affect disclosure requirements?
Shareholding disclosure regulations are concerned with the exchanges where a financial instrument is traded, rather than the single venue where the asset was purchased. Since many of our rules lookup MarketsListedIn value as a criterion for disclosures, particular care must be given to securities with multiple listings. Such securities can trigger multiple disclosures in ways that users might find unexpected. For example, if we held a DR of a Swiss incorporated company with a HomeMemberState in Norway, listed in both those countries, but also listed on a Korean exchange, we could trigger disclosures in 3 jurisdictions at an appropriate threshold:
Major: Switzerland - Aggregated (triggers on CountryOfIncorporation = CH and MarketsListedIn = XBRN)
Major: Norway (triggers on HomeMemberState = NO)
Major: South Korea (triggers on MarketsListedIn = XKRX)
Without properly populating the MarketsListedIn field, we may have ended up missing the Korean disclosure, only triggering the arguably more obvious Swiss and Norwegian disclosures.
The main point here is that providing only the primary trading venue is not necessarily enough to make the rule check sufficient, as secondary listings are a deciding factor in quite a few jurisdictions across the world.
How does this impact users?
With the effect that this single field can have on your disclosures, it is vital that users source high-quality information for MarketsListedIn. If in doubt, we recommend the conservative approach of including more exchanges, as this will reduce the likelihood of missing a disclosure.
How do rules use it?
When a file is uploaded, the FundApps rules engine runs against all your holdings and the first part of any rule that runs is the "Foreach Expression" which filters your positions and picks out the holdings that are relevant for disclosure in a specific rule (for a more comprehensive overview of how our rules work, please read this article).
Any checks for MarketsListedIn values will be done by the Foreach Expression. Typically, the rules engine will check whether the instrument is listed on a single market or any one of a series of markets. In the below picture, the Major: Hong Kong rule is looking up whether the asset is listed in SHSC, SZSC, XGEM or XHKG (Hong Kong Growth Enterprises Market and Hong Kong Stock Exchange, respectively, which are the two exchanges that comprise "recognized stock markets" in Hong Kong.).
How is the Market property used?
It is critical that for any market, segment MICs are provided for these properties. In ISO’s official FAQ’s for the MIC standard under the section “MIC LEVELS”, it is important to take note of the definitions of “market segment MIC” and “operating MIC” and the point that “The use of market segment MICs provides more accuracy.” Each operating MIC is also a segment MIC, so in practice, one can only be said to provide an “operating MIC” where it happens to be identical to the segment MIC (e.g. where it is the main board or the only venue for an exchange). These properties help to inform the system which securities are in the scope of which jurisdictions. Especially for these properties, inaccurate data leads to a significant risk of inaccurate rule calculations and therefore a risk of missed disclosures.
FundApps is unable to validate whether our clients are providing the MICs at the granularity of segment MIC, so if you are not 100% confident, we strongly recommend that you re-confirm with your data provider(s) that MICs are provided at segment MICs level.