Transaction reporting (2024)

Data quality

Complete and accurate data is critical to transaction reporting. In order to be able to monitor for market abuse effectively, we need to receive complete and accurate information regarding the types of instruments, when and how they are traded and by whom. This is set in Article 26(1) of UK MiFIR which states that investment firms which execute transactions shall report complete and accurate detailsof such transactions.

Each transaction report includes, amongst other elements:

• information about the financial instrument traded
• the firm undertaking the trade
• the buyer and the seller
• the date/time of the trade

The Markets Reporting Team (MRT) is responsible for monitoring the quality of transaction reporting data. They are also responsible for specialist supervision of firms’ compliance with thetransaction reporting provisions and for the formulation of transaction reporting policies and instrument reference data.

The European Securities and Markets Authority (ESMA) has developed guidelines on transaction reporting, order record keeping and clock synchronisation ('the Guidelines').

We expect firms and market participants to continue to apply the Guidelines to the extent that they remain relevant, and to sensibly and purposefully interpret them in light of the UK’s withdrawal from the EU and the associated legislative changes that are being made to ensure the UK regulatory framework operates appropriately.

Submitting transaction reports

Under Article 26(7) of UK MiFIR transaction reports can only be submitted by:

• an investment firm submitting their own reports
• an Approved Reporting Mechanism (ARM) acting on behalf of an investment firm
• a trading venue through whose systems the transaction took place

All transaction reports must be made to us only once.

• EEA firms that operate through a UK branch, and that enter the temporary permissions regime, must either connect directly to the MDP or use an Approved Reporting Mechanism (ARM) authorised with us to be able to transaction report to us from 1 January 2021.
• UK trading venues must report to us from 1 January 2021 transactions executed on their venues by their members that are EEA firms and are not trading on the UK venue through a UK branch.

Errors and omissions notifications

If your firm becomes aware of any error or omission in its transaction reports, including any failure to submit a transaction report, you must complete an errors and omissions notification using Connect.

Make sure the notification is completed in full, with all details necessary to allow us to review the error or omission.You can also attach supporting documents, eg external review results.All subsequent updates on an already submitted notification should be emailed via [emailprotected] quoting your submission reference number.

If your firm is registered for Connect and you require additional users, please refer to the Connect user management guide. If your firm is not yet registered to use Connect, please see the Connect registration pages.

Contact the Markets Reporting Team at [emailprotected] with any questions about transaction reporting errors and omissions notifications.

Back reporting

Under Article 26(7) of UK MiFIR, where errors or omissions are identified in transaction reports, the ARM, investment firm or trading venue reporting the transaction must cancel the report, correct the information, and submit a new corrected report to the FCA. Late and unreported transactions must be reported without further delay.

Please be aware that transaction reporting validation rule 269 states the trade date cannot be earlier than 5 years before the submission date. As such, from 3 January 2023 onwards, for transaction reports submitted with a trade date of greater than 5 years, the firm will receive a CON-281 rejection, meaning these transaction reports will not be accepted by the FCA and you will be unable to submit these reports.

Errors and omissions notifications should continue to contain details of when the error or omission first occurred and the number of transaction reports impacted, even if this extends beyond 5 years. Firms should then indicate how many of the impacted transaction reports will be remediated bearing in mind validation rule 269.

Resources

In relation to transaction reporting, order record keeping for trading venues and clock synchronisation, the following provisionsapply.

Firms should understand the rules and guidance and how to apply it in practice:

• Markets in Financial Instruments Regulation (EU) No 600/2014 as onshored (UK MiFIR)
• Commission Delegated Regulation (EU) 2017/590 (RTS 22) as onshored and any other relevant onshored technical standard (RTS 22)
• FCA’s Supervision sourcebook (SUP 17A)
• FCA’s Market Conduct sourcebook (MAR 9.5)
• ESMA’s Guidelines on transaction reporting, order record keeping and clock synchronisation
• ESMA Questions & Answers on MiFIR data reporting
• ESMA’s MiFIR opinion on traded on a trading venue (TOTV)

Market participants should also ensure that they follow the schema validation, reporting instructions and the transaction reporting validations.

ESMA recently issued a statement outlining planned changes to their transaction reporting validation rules in Q2 2022. The Financial Conduct Authority will not be changing the current rules used to validate transactions submitted to the Market Data Processor (MDP).

Entities that submit transaction reports directly to the MDP (Approved Reporting Mechanisms (ARMs), trading venues and investment firms submitting their own reports) may implement these additional and other validations should they wish to, where they feel this will improve the data quality of their submissions.