The Financial Conduct Authority (FCA) has led its proposal for new transaction reporting rules with the promise that it will save UK firms more than £100 million annually. But those on the ground do not expect to see their costs go down.
Cathy Gibson, global head of trading at Ninety One, told Global Trading, “As a global firm operating across geographic regions, with diverging reporting requirements, I would not anticipate significant cost reduction on the back of the proposed FCA changes on transaction reporting.”
The FCA estimates that firms spend approximately £493 million each year to meet UK MiFIR transaction reporting requirements.
Responses from the FCA’s 2024 discussion paper highlighted the burden of duplicative reporting across further regulations, such as EMIR and SFTR. For firms operating across jurisdictions, this reporting – and associated costs – are multiplied.
In Europe, ESMA is facing a similar battle to wrangle its reporting requirements. The results of its consultation on the matter are expected to be published in early 2026.
READ MORE: ESMA consults on how to simplify transaction reporting
The UK regulator admitted that the data it does gather is often left unused: “We do not regularly use some of the importation we collect under these regimes, creating a potentially disproportionate cost on firms.”
In an effort to reduce reporting requirements, the FCA’s proposals intend to remove FX derivatives and six million financial instruments only traded on EU venues from reporting requirements.
Within the reports themselves, the number of fields that trading venues must populate would be simplified and the number of instrument reference data fields would be cut from 48 to 37. The long-term goal of the regulator is to adopt a “report once” principle, where firms would submit their data to a central repository.
The window for corrections to historic reporting errors would be reduced from five to three years. Systematic internalisers would no longer be obliged to submit instrument reference data.
Introducing these changes would support UK economic growth, protect market integrity and allow for more effective financial crime control, the regulator argues.
However, these proposals are the start of a long journey.
“The proposals in this CP do not remove all duplication or achieve complete harmonisation of requirements. This can only be addressed through a longer-term review of requirements across several regimes, involving the Treasury and Bank of England.”
