Smartstream’s Reference Data Services unit has launched its RegRegistry service
A recent fine shows that regulators are losing patience with failures in post-trade transaction reporting. Linda Coffman, Reference Data Services Smartstream, suggests that specialist data services can help firms improve their ability to comply.
“In response to the growing industry need, Smartstream’s Reference Data Services unit has launched its RegRegistry service.” Linda Coffman, EVP Smartstream
January 2025 saw the UK’s Financial Conduct Authority (FCA) impose a fine of £99,200 on a global brokerage firm for breaching Article 26(1) of the Markets in Financial Instruments Regulation (MiFIR) — the FCA’s first enforcement action for transaction reporting failures under the UK regulation.
Between 1 October 2022 and 31 March 2023, the broker failed to submit any transaction reports to the FCA by close of the following working day, or at all, in relation to transactions undertaken by its single-stock contracts for difference (CFD) desk through one of its corporate brokerage accounts. Ultimately, this resulted in the firm not submitting a total of 46,053 reports.
In an accompanying press announcement, the FCA emphasised that it required complete and accurate information from firms under its supervision about the types of instruments traded, when and how they were traded, and by whom.
As this data played a key role in its ability to conduct effective market oversight, the Authority considered the broker’s failure to submit any transaction reports for approximately 60 per cent of its single-stock CFD business line by close of the following day particularly serious. The fact that the firm had identified the discrepancies, but not proactively reported them, further exacerbated the case.
The recent Market Watch 81 newsletter, published in November 2024, also underscores the FCA’s desire to tackle poor transaction reporting. Discussing its supervision of the UK Markets in Financial Instruments Directive (MiFID) transaction reporting regime, the regulator commented that it continued to identify incomplete and inaccurate transaction reports.
Worse still, it had seen data quality issues persist and reoccur even after they had been identified and allegedly remediated. The FCA expected firms to note its findings and make enhancements to their transaction reporting environment to comply with relevant requirements.
So why do data quality issues continue to persist and what can organisations do to remediate them?
One headache is the constantly-evolving nature of the regulatory landscape. Consider recent changes to the MiFIR post-trade transparency (PTT) rules that determine which counterparty to an OTC trade must undertake PTT reporting. In the wake of the EU MiFIR Review and the UK Wholesale Market Review, the EU introduced its Designated Publishing Entity (DPE) regime in February 2025, while the UK brought in the Designated Reporter (DR) system in April 2024.
Following these changes, firms firstly need to be aware that the connection between systematic internalisers and PTT reporting has been removed. Secondly, when engaging in an OTC trade, firms must determine if their counterparty is a DR or a DPE. Correctly identifying the status of a counterparty is vital, especially if financial institutions want to avoid under or over-reporting, thereby potentially finding themselves in the crosshairs of the regulator. Achieving this goal promptly and efficiently, however, hinges on having easy access to reliable data.
