The FCA highlights areas of concern with regards to MiFID transaction reporting
FCA have today released Market Watch 65 which highlights several areas of concern with regards to MiFID transaction reporting, including:
- Under-reporting - some firms have misinterpreted the reportable product requirements and failed to submit transaction reports for transactions executed in non-EEA listed indices or baskets composed of one or more financial instruments admitted to trading on an EEA trading venue,
- clarification of the definition of ultimate underlying,
- errors with the population of the TvTIC code,
- errors with the population of the Country of Branch field,
- a reminder that firms cannot assume that if the record has been accepted by the NCA that the details within it are correct, and
- a reminder that firms should regularly reconcile reported data to front office records.
UnaVista’s ARM already incorporates 350+ validation tests to assist firms with their accuracy obligations. The ARM itself is updated to ensure that all data validations are in line with ESMA’s guidelines. In addition, UnaVista can assist clients with their reconciliations and also provides a product eligibility service to assist clients to report the correct products. Further UnaVista Analytics - Data Accuracy module, to be released shortly, contains Alerts designed to highlight reporting errors and Dashboards to facilitate analysis of reported data to ensure that some of the common errors made and commented on by regulators can be monitored for easily by firms.
We recommend that clients take legal and compliance advice as to the content of their transaction reports in order to validate that their interpretation and compliance with ESMA rules and guidance meets their specific circumstances and business model.