Global: FCA Unveils Plans to Streamline Transaction Reporting Framework

The UK’s Financial Conduct Authority (FCA) has announced a series of proposed reforms aimed at simplifying transaction reporting obligations—an adjustment expected to save financial firms an estimated £100 million annually.

Under the proposed changes, the FCA plans to remove foreign exchange derivatives from the scope of transaction reporting. In addition, reporting requirements would be eliminated for approximately six million financial instruments—spanning equities, bonds, and certain derivatives—that are traded exclusively on EU venues and no longer deemed necessary for UK regulatory oversight.

The regulator is also seeking to reduce the window for correcting historical reporting errors from five years to three. This adjustment, the FCA says, would decrease the volume of resubmitted transaction reports by around one-third.

Overall, the measures are projected to reduce the total cost of managing more than seven billion MiFID transaction reports submitted each year—lowering annual compliance expenditure from nearly £500 million to about £400 million.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, highlighted the dual benefit of the reforms:

Transaction reports are essential for detecting financial crime and monitoring market integrity. However, we can take a more efficient approach. By clarifying and streamlining the requirements, we expect firms to provide more accurate and complete data. Reducing costs while improving data quality is a clear win—supporting market growth and enhancing the intelligence we rely on.

Despite the improvements, the proposal falls short of what some industry participants had hoped for. Hedge funds had lobbied for a full exemption for buy-side firms—similar to regulatory regimes in the US and Japan. The FCA rejected this, noting the uniquely international nature of the UK market, where buy-side firms account for more than half of all transactions.

Adam Jacobs-Green of the Alternative Investment Management Association expressed disappointment, telling the Financial Times that the industry had hoped UK fund managers would be removed from the reporting framework altogether.

Rollo Burgess, Partner at Capco, welcomed the regulator’s efforts but cautioned about potential operational challenges linked to global regulatory divergence.

A thoughtful simplification of reporting obligations should not increase operational risk,” he said. “However, differing requirements across jurisdictions could introduce new complexities—contrary to the spirit of harmonisation these proposals aim to achieve.