The UK’s financial watchdog has proposed a set of transaction reporting reforms which it says will save financial services firms over £100 million every year.

The proposals include removing foreign exchange derivatives from reporting requirements, reducing costs for 400 firms.

The Financial Conduct Authority (FCA) also said that it will remove reporting requirements for six million financial instruments including equities, bonds and certain derivatives that are only traded on EU trading venues.

As well as this, the regulator plans to reduce the period for correcting historic reporting errors from five to three years, lowering the number of transaction reports that need to be resubmitted by a third.

The FCA receives over seven billion MiFID transaction reports a year used to support the cleanliness, transparency and resilience of UK markets.

The annual cost of MiFID transaction reporting to industry is currently £493 million, with the organisation expecting a cost reduction to around £385 million following the reforms.

The transaction reporting rules were introduced in 2018 and on-shored from the EU on 31 December 2020.

The FCA said that it plans to work alongside the Bank of England and the Treasury to remove any unnecessary duplication of transaction and post-trade reporting requirements as part of a new long-term approach.

“Transaction reports are essential, helping us to detect financial crime and monitor the resilience of our markets,” said Therese Chambers, joint executive director of enforcement and market oversight, FCA. “But we can be smarter, and by clarifying and streamlining requirements we expect to receive more accurate and complete reports.”

She continued: “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.”

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