Fifth Of UK Fund Managers Make Reporting Errors to FCA

According to data obtained under an FOI request by Duff & Phelps, approximately one-fifth of all UK fund managers are guilty of making errors in their transaction reporting to the Financial Conduct Authority (FCA). 

These errors have been caused by a failure to meet the highly complex and detailed transaction reporting requirements enforced by MiFID II. 

In January 2018, MiFID II was implemented in an attempt to improve the transparency of European markets by forcing investment managers to provide reports of all transactions. As a result of this, most firms have had to use third-party reporting systems – such as eflow’s transaction reporting solution – to meet the demands put forward in MiFID II.

These demands, however, have proved difficult to meet. According to the data collected by Duff & Phelps, at least 546 firms have admitted to making errors in their transaction reporting since MiFID II came into effect. These amounts to roughly 15% of the 3,274 investment firms currently operating in the UK. 

In addition to these offending firms, the FCA has contacted 223 more firms regarding potential issues with their reporting data. This means that approximately 20% of all UK fund managers have discussed erroneous reporting with the FCA.

Nick Bayley, a former FCA regulator, has claimed that we are still currently in a ‘honeymoon period of education and encouragement in relation to transaction reporting’.

Both ESMA and National Competent Authorities (NCAs) across Europe have been somewhat lenient with low-quality reporting since MiFID II’s implementation. However, regulatory bodies are becoming increasingly strict as this ‘honeymoon period’ draws to a close. 

Clashes Between EU and UK Asset Managers Over MiFID II Unbundling

Disagreement Over Research Unbundling Between UK and EU Fund Managers As part of the regulatory framework enacted by MiFID II in January of 2018, asset managers were required to separate the cost of research from other costs such as trading commissions. This...

COVID-19 Exposes Gaps in Market Data Supply

Market Data Vendors Struggle to Keep Up Amid Coronavirus Pandemic Since the outbreak of COVID-19 has spread and made its impact known on global markets, a number of banks and investment firms have been required to fall back on Business Continuity Measures (BCP). As a...

Best Execution Reporting During the COVID-19 Pandemic

ESMA Releases Public Statement on MiFID II Best Execution Reporting During COVID-19 Pandemic The disruption to markets caused by preventative lockdowns in response to the Coronavirus pandemic has caused execution venues and firms a great deal of uncertainty with...

ESMA Publishes Opinions on Position Limits under MiFID II

Updated Opinions on Position Limits Under MiFID II Published by ESMA On February 7th, ESMA published seven opinions on position limits regarding commodity derivatives under MiFID II/MiFIR.  The opinions published by ESMA agree with a number of proposed position limits...

Non-Compliance Fines Exceed $36 Billion Since 2008 Financial Crisis

Global financial institutions have been fined over $36 billion since 2008 At the close of the decade, global fines for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC) and sanctions regulations have exceeded $36 billion since the financial...

Get In Touch