Widespread errors present in UK MiFIR transaction reporting
03 June 2019 London
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More than 1,300 Markets in Financial Instruments Regulation (MiFIR) transaction reporting error and omission notifications were received by the Financial Conduct Authority (FCA) in 2018, according to analysis by Duff & Phelps.
Figures released by the FCA indicated 383 entities notified it of problems with their MiFIR reporting in 2018, accounting for 10 percent of the 3,784 UK investment firms that are required to be MiFIR compliant.
Duff & Phelps’ data provides clarity on compliance reporting shortfalls among UK investment firms and follows previous reports that more than 1,300 Markets in Financial Instruments Directive breaches were reported to the FCA in 2018.
The FCA processed more than 6.9 billion UK MiFIR transaction reports in 2018.
Nick Bayley, managing director of compliance and regulatory consulting at Duff & Phelps, said: “There are likely many more firms, particularly on the buy-side, that are unaware that they are reporting incorrectly.”
“I suspect the true number of firms with reporting errors is much higher. The data also shows that many firms notified the FCA on more than one occasion, suggesting that there could be systemic issues with some firms’ reporting processes.”
He added: “After the rush to implement MiFID II at the start of 2018, the FCA was in ‘education mode’ concerning transaction reporting and the focus was on teaching firms how to interpret the rules.”
“What we see now is that the FCA is in ‘encouragement mode’, telling firms how they can avoid common errors. It surely cannot be too much longer before the FCA starts to transition into ‘enforcement mode’, particularly for those firms failing to make a genuine effort to meet their regulatory requirements.”
Figures released by the FCA indicated 383 entities notified it of problems with their MiFIR reporting in 2018, accounting for 10 percent of the 3,784 UK investment firms that are required to be MiFIR compliant.
Duff & Phelps’ data provides clarity on compliance reporting shortfalls among UK investment firms and follows previous reports that more than 1,300 Markets in Financial Instruments Directive breaches were reported to the FCA in 2018.
The FCA processed more than 6.9 billion UK MiFIR transaction reports in 2018.
Nick Bayley, managing director of compliance and regulatory consulting at Duff & Phelps, said: “There are likely many more firms, particularly on the buy-side, that are unaware that they are reporting incorrectly.”
“I suspect the true number of firms with reporting errors is much higher. The data also shows that many firms notified the FCA on more than one occasion, suggesting that there could be systemic issues with some firms’ reporting processes.”
He added: “After the rush to implement MiFID II at the start of 2018, the FCA was in ‘education mode’ concerning transaction reporting and the focus was on teaching firms how to interpret the rules.”
“What we see now is that the FCA is in ‘encouragement mode’, telling firms how they can avoid common errors. It surely cannot be too much longer before the FCA starts to transition into ‘enforcement mode’, particularly for those firms failing to make a genuine effort to meet their regulatory requirements.”
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