By PAUL O’DONOGHUE, Senior Correspondent
THE FCA (Financial Conduct Authority) has proposed cutting financial crime transaction reporting requirements for UK firms, in a move it estimates will save businesses over £100 million ($130 million) per year.
“The regulator proposes to streamline transaction reporting requirements to reduce costs for firms, support growth and improve the quality of data received,” it said.
The FCA has proposed:
- Removing foreign exchange derivatives from reporting requirements
- Removing reporting requirements for “6 million financial instruments”. These include – equities, bonds and “certain derivatives that are only traded on EU trading venues”.
- Reducing the period for correcting historic reporting errors from five years to three years.
The proposals are currently at the consultation stage. The FCA must still convert the proposals into formal guidance.
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, said: “Transaction reports are essential, helping us to detect financial crime and monitor the resilience of our markets.
“But we can be smarter. By clarifying and streamlining requirements, we expect to receive more accurate and complete reports.
She added: “Reducing costs while improving the quality of the data we receive is a no brainer. It means we can support growth and receive better market intelligence to act on.”
The FCA said it will work with the Bank of England and the UK Treasury to remove “any unnecessary duplication of transaction and post-trade reporting requirements”. It said this is “part of a new long-term approach”.
The FCA estimates the current annual cost of MiFID transaction reporting to industry is £493 million. MiFID reporting obliges financial instiutions to report detailed information about certain financial trades to the FCA.
The regulator estimates its changes will result in a “net annual cost saving to industry of £108 million”.
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