ESMA just released guidelines that reinforce what was already clear in the MiFIDII regulation – that GPS time is an acceptable source of “traceable” time. As Galileo time becomes available there will surely be some European preference for that source, but ESMA has made it clear that satellite time is fit for purpose.
As per Article 1 of the MiFIR RTS 25, systems that provide direct traceability to the UTC time issued and maintained by a timing centre listed in the BIPM Annual Report on Time Activities are considered as acceptable to record reportable events. The use of the time source of the U.S. Global Positioning System (GPS) or any other global navigation satellite system such as the Russian GLONASS or European Galileo satellite system when it becomes operational is also acceptable to record reportable events. GPS time is different to UTC. However, the GPS time message also includes an offset from UTC (the leap seconds) and this offset should be combined with the GPS timestamp to provide a UTC timestamp.
The clock sync requirement comes from Article 1.
Article 1 Reference time. Operators of trading venues and their members or participants shall synchronise the business clocks they use to record the date and time of any reportable event with the Coordinated Universal Time (UTC) issued and maintained by the timing centres listed in the latest Bureau International des Poids et Mesures Annual Report on Time Activities. Operators of trading venues and their members or participants may also synchronise the business clocks they use to record the date and time of any reportable event with UTC disseminated by a satellite system, provided that any offset from UTC is accounted for and removed from the timestamp. Regulatory technical and implementing standards – Annex I MiFID II / MiFIR
However all this makes it more critical to be able to failover or holdover when satellite time source fails and to be able to detect those failures or even detect problems before they become critical.
