Trade and Transaction Reporting
Although regulators globally are pursuing a number of initiatives to standardise and simplify the reporting obligations placed on firms, the challenge of timely and accurate reporting remains significant.
The potential penalties for errors are also rising, with the FCA (UK), Central Bank of Ireland, CFTC (US), MAS (Singapore) and ASIC (Australia) all issuing fines for reporting failures in recent years.
MiFIR compliance
Depending on an investment firms geographic footprint, and products and services offered, an overlapping web of reporting requirements may apply. These include:
- MiFIR – in the UK and EU, regulators require daily reporting on transactions executed by firms, to support their market abuse detection and prevention efforts
- Post-trade transparency reporting – large investment banks and brokers in OTC markets may also face a requirement to provide real-time reporting of transactions they execute off venue, to contribute to price transparency
- Derivatives reporting – the majority of G20 nations have adopted mandatory reporting of new transactions and ongoing positions in OTC derivatives, to monitor for systemic risk
- SFTR – in the UK and EU a reporting regime broadly similar to that for OTC derivatives has also been adopted for securities financing transactions, mostly capturing exposures in repo and stock borrow/lending markets
Compliance with regulatory bodies
In addition, Exchanges and trading venues face their own reporting challenges, including:
- MiFIR – in the UK and EU, trading venues may be responsible for reporting transactions on behalf of certain participants (e.g. overseas participants who don’t have their own reporting obligations)
- Post-trade transparency reporting – price transparency is a key part of a trading venues regulatory obligations in most regulatory regimes
- Instrument reference data – in the UK and EU, strict rules apply around informing regulators of the instruments which a trading venue has made available for trading
- Commodities disclosures – many jurisdictions have specific rules for disclosure of position information, and application of position limits, for commodity derivative markets.
Compliance Health Checks
ComplyCraft partner with our clients, to assist them in untangling the web of overlapping reporting requirements. Our assistance to firms includes:
- Reporting assessment and set-up – we support newly regulated firms, and firms extending their activities, to assess their reporting obligations. We can assist with creating field-level reporting guides, advise on the reportability of specific instruments, and assist with the implementation of reporting frameworks.
- Reporting healthchecks – we routinely assist firms with assessing the robustness of their reporting arrangements. This can include analysis of the accuracy and completeness of a sample of reporting, along with an assessment of governance, oversight and controls for the reporting process.
- Ongoing assurance – partnering with Qomply, ComplyCraft offer an ongoing managed service, to ensure that reporting is accurate and complete, and errors are identified and remediated on a timely basis.
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