| UK & Europe | Articles
In Market Watch 81 the FCA highlighted the ongoing issue of incomplete and inaccurate transaction reports. While the regulator acknowledges the continuing trend of improved data quality since 2018, there is still work to be done.
The FCA has observed that data quality issues still persist and, in some cases, reoccur even after the issue has been identified and allegedly remediated by a firm. Their findings indicate that the root causes of reporting issues can be attributed to weaknesses in:
- Change management
- Reporting process and logic design
- Data governance
- Control frameworks
- Governance, oversight and resourcing
These are issues we often flag to clients following a transaction reporting health check. Another important message is that the FCA expects issues that have been identified and remediated by firms to stay ‘remediated’.
What firms should be doing now
Review your transaction reporting governance arrangements to see if it’s still fit for purpose. Are your end-to-end processes working as intended? Is there any key person risk or key process dependency? And importantly, do senior management have adequate oversight of the entire transaction reporting set up and how this oversight is demonstrated?
Think back to when your firm last went through any change management, whether it was a change of processes, systems or personnel, and whether these changes were documented. Were key decisions noted with a supporting rationale and any associated manual, policy or guidance updated accordingly?
Does your reporting logic still make sense? Has there been any change to your trading activity and has sufficient thought been given to how this might affect your reporting? As it has been cited as an example in this Market Watch, field 36 may merit some attention to ensure you report it correctly.
Revisit any previous issues that have been remediated to gain comfort that these have not reoccurred.
How we can help
Our health checks provide assurance on your entire transaction reporting process under the UK MiFID transaction reporting regime. This is a comprehensive assessment of your reporting arrangement, covering:
- a review of your end-to-end process, including any high-risk steps specific to your organisation and your documented policies and procedures
- an assessment of your governance and oversight arrangements for transaction reporting
- comprehensive analysis of your order management system data output against both the regulatory requirements and data received by the FCA.
For advice on the transaction reporting regime or to find out about our health checks, get in touch.
Get in touch
