Over £100m in savings have been set out by the FCA as the regulator proposes to streamline transaction reporting requirements.
The FCA receives over 7 billion MiFID transaction reports a year used to support the cleanliness, transparency and resilience of UK markets.
To reduce costs for firms, support growth and improve the quality of data received, the FCA has proposed:
- Removing foreign exchange derivatives from reporting requirements, reducing costs for over 400 firms
- Removing reporting requirements for 6 million financial instruments including equities, bonds and certain derivatives that are only traded on EU trading venues
- Reducing the period for correcting historic reporting errors from 5 to 3 years, lowering the number of transaction reports that need to be resubmitted by a third
Therese Chambers, joint executive director of enforcement and market oversight, said:
'Transaction reports are essential, helping us to detect financial crime and monitor the resilience of our markets. But we can be smarter, and by clarifying and streamlining requirements we expect to receive more accurate and complete reports.
'Reducing costs while improving the quality of the data we receive is a no-brainer. It means we can support growth and receive better market intelligence to act on.'
The FCA will work in lockstep with the Bank of England and the Treasury to remove any unnecessary duplication of transaction and post-trade reporting requirements as part of a new long-term approach.
Notes to editors
- Read CP25/32: Improving the UK transaction reporting regime[1] (PDF)
- The current annual cost of MiFID transaction reporting to industry is £493m.
- The FCA estimates the changes we are proposing will reduce the cost to approximately £385m. Resulting in a net annual cost saving to industry of £108m.
- The transaction reporting rules were introduced in 2018 and onshored from the EU on 31 December 2020. The FCA is working to deliver a streamlined framework that will cut costs for business while ensuring effective regulatory oversight of the UK’s world-leading capital markets.
- As part of the new long-term approach to transaction reporting, the FCA will work with the Bank of England and Treasury to streamline requirements and reduce duplication across different data collections, including UK MiFIR, EMIR and SFTR.