Investment firms are expected to collectively save over £100 million per year from reforms being adopted by the U.K.’s Financial Conduct Authority (FCA) that will reduce their transaction reporting obligations.
The FCA issued final rules that aim to reduce unnecessary or duplicative trade reporting requirements, which the regulator estimates will reduce the industry’s annual cost of transaction reporting to £385 million from the current cost of £493 million — a projected annual saving of £108 million.
Among other things, the new rules will remove foreign exchange derivatives reporting requirements, eliminate reporting requirements for certain financial instruments that are only traded on EU trading venues (including equities, bonds and derivatives), lower the period for correcting historical errors from five to three years and trim the number of fields that have to be reported overall.
The FCA said that the new rules aim to ensure that regulators “receive accurate, high-quality data while eliminating duplicative or low-value reporting.”
“Transaction reports are the backbone of our market oversight work — they help us catch financial crime, monitor market stability and supervise firms effectively,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA, in a release.
‘”By taking a smarter, streamlined approach to reporting, we’re giving firms meaningful cost relief while ensuring we continue to receive the accurate, high-quality data that keeps U.K. markets clean and competitive,” she added.
The new requirements won’t take effect until April 2028, to give firms time to develop and implement the systems changes needed to conform to the new rules. However, the FCA noted that firms will be allowed to make certain changes sooner.
