Trade and Transaction reporting has long been a key area of focus for the FCA - the UK regulator fined global investment banks Goldman Sachs and UBS £34.3 million and £27.6 million in 2019 for failures in this area.
Transaction reporting has increased in significance since the global financial crisis of 2007-2008 following the G20 Pittsburgh summit in 2009, where global leaders identified improvement in transparency and reporting as a key area of reform.
As an EU member the UK has developed its trade and transaction reporting regulatory framework in line with EU legislation - primarily EMIR, MIFID II and MIFIR.
The end of the Brexit transition period on 31 December 2020 resulted in a number of significant changes in trade and transaction reporting, including a switch from ESMA to FCA reference data sources.
Increased focus from regulators and a raft of new reporting rules and regulations in the last decade have put a strain on many firms’ reporting systems. Mandatory changes following the UK’s exit from the EU are likely to compound some of these existing challenges.
The FCA won’t take enforcement action against firms that have taken reasonable steps to prepare for new (post-Brexit) obligations. However, pre-existing issues won’t benefit from this moratorium so it’s essential that firms have an accurate and up-to-date assessment of compliance with reporting requirements.
A detailed assessment backed up by a formal programme of work to remediate any existing gaps and address post-Brexit changes are critical components of an effective approach.