Regulatory Update – a Focus on EMIR and MiFIR Trade Reporting Continues

An emerging trend of regulatory focus in the United Kingdom is EMIR and MiFIR transaction reporting, illustrated by the prominent attention given to it in the FCA’s regular Market Watch publication. Since April 2019, transaction reporting has featured three times in the corporate regulator’s newsletter.

In its first feature, the FCA provides its observations on data quality and arrangements of market participants in their submission of trade reports. Market Watch 59 reminded market participants of their requirement to

conduct regular reconciliation of front office trading records against data samples stressing “[f]irms should not assume that a report was accurate because it was accepted by the Market Data Processor, as business validation rules are not intended to identify all errors and omissions.”

In raising the errors and omissions detected, the FCA reminded market participants of their obligation to correct the information. The FCA was critical of some firms who identified errors and/or omissions in their transaction reports but failed to cancel and resubmit corrected reports to the FCA contrary to MiFIR requirements.

In Market Watch 62, the FCA put out its second iteration of transaction reporting errors. The FCA did report that many firms had taken steps to ensure that the common errors outlined were eliminated. Despite the improvement, the FCA still identified errors in price related fields, namely, the price currency was reported inconsistently with the currency in the ‘price’ field. Similar areas were additionally identified with inconsistencies between ‘price multiplier’ and ‘quantity’ or ‘price’ fields.

Market Watch 62 also identified reporting errors for unique national identifiers and the misuse of aggregate client account convention reporting. However, the key takeaway is FCA’s direction to not delay in submitting a notification to the FCA when the errors are identified.

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