FCA updates guidance on regulatory reporting for short sales and SFTs
28 July 2023 UK
Image: WavebreakMediaMicro
The Financial Conduct Authority (FCA) will extend the transition period for implementation of short sales reporting under UK MIFIR and will introduce temporary amnesties for firms that fail to complete reporting fields for securities finance trades and a number of other indicators.
The UK financial regulator introduced temporary measures in January 2022 relating to reporting of the short sales indicator under UK RTS 22, regulatory technical standards governing trade reporting to competent authorities which is part of post-Brexit UK law via the European Union (Withdrawal) Act.
Through this arrangement, UK RTS 22 is the UK enactment of a supplement to the Markets in Financial Instruments Regulation (MiFIR) governing trade reporting to financial regulators, provisions spelt out in the Commission Delegated Regulation (EU) 2017/590 of 28 July 2016.
Through its temporary measures, the FCA has indicated that it will not take action against firms that have failed to populate the short selling indicator field in the relevant transaction reports and it will be extending this moratorium that has been in place since January 2022.
It has also introduced temporary measures indicating that it will not take action against firms that fail to complete other reporting fields: specifically the securities financing transaction indicator, the OTC post-trade indicator, the commodity derivative indicator and the waiver indicator (respectively fields 65, 63, 64 and 61 under UK RTS 22).
In accordance with this provision, the FCA will disable relevant reporting validation rules (specifically CON–610 and CON-640) to prevent submitted trade reports from being rejected in cases where these fields have not been completed accurately.
The FCA will be integrating this new schema into the Market Data Processor (MDP) system, — through which reporting entities can submit trade reporting data to the financial regulator — in due course, but prior to implementation of a wider body of changes detailed in the FCA policy statement PS 23/4 which focuses on improving secondary markets for equities transactions.
The UK financial regulator introduced temporary measures in January 2022 relating to reporting of the short sales indicator under UK RTS 22, regulatory technical standards governing trade reporting to competent authorities which is part of post-Brexit UK law via the European Union (Withdrawal) Act.
Through this arrangement, UK RTS 22 is the UK enactment of a supplement to the Markets in Financial Instruments Regulation (MiFIR) governing trade reporting to financial regulators, provisions spelt out in the Commission Delegated Regulation (EU) 2017/590 of 28 July 2016.
Through its temporary measures, the FCA has indicated that it will not take action against firms that have failed to populate the short selling indicator field in the relevant transaction reports and it will be extending this moratorium that has been in place since January 2022.
It has also introduced temporary measures indicating that it will not take action against firms that fail to complete other reporting fields: specifically the securities financing transaction indicator, the OTC post-trade indicator, the commodity derivative indicator and the waiver indicator (respectively fields 65, 63, 64 and 61 under UK RTS 22).
In accordance with this provision, the FCA will disable relevant reporting validation rules (specifically CON–610 and CON-640) to prevent submitted trade reports from being rejected in cases where these fields have not been completed accurately.
The FCA will be integrating this new schema into the Market Data Processor (MDP) system, — through which reporting entities can submit trade reporting data to the financial regulator — in due course, but prior to implementation of a wider body of changes detailed in the FCA policy statement PS 23/4 which focuses on improving secondary markets for equities transactions.
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