Market watch 74 release by the FCA

August 1, 2023

On 25th of July 2023 the FCA published its Market Watch 74

Here are the key points of this report.

Reconciliations and Breach Notification

Firms are required to reconcile front-office records with data samples provided by the FCA under Article 15(3) of RTS 22.

Article 26(7) of UK MiFIR required firms to cancel a report which has errors or omissions and submit a new corrected report.

Article 15(2) of RTS 22 and SUP 15.3.11R requires firms to submit a transaction reporting breach notification.

The table below shows the number of firms making data extract requests using the FCA’s Market Data Processor Entity Portal and depicts the number of firms who have submitted such notifications since 2018.

Year Number of firms requesting extracts Number of firms submitting breach notifications
2018 451 383
2019 630 428
2020 677 417
2021 716 385
2022 745 346


The FCA clarifies that firms not being aware of the portal or using data extracts provided by ARMs for their reconciliations is not a valid excuse and they should ensure where errors or omissions are identified in transaction reports, the firm reporting the transaction must cancel the report and submit a new corrected report to the FCA.


Identification of Investment and Execution Decision Makers

Article 8(2) and Article 9(4) of RTS 22 require firms to establish pre-determined criteria for determining who is primarily responsible for making investment and execution decisions.

The regulator has identified that firms assign this responsibility to a wide variety of natural persons.

The FCA urges firms to not simply assign responsibility based on seniority, but based on practical involvement and experience.

Control Now supports this requirement with providing a summary of the distinct investment decision makers and execution decision makers where the decisions are made by natural persons or algorithms, allowing firms to monitor the values reported on those fields. CN clients can find this information in ‘Decision Makers’ and ‘Algos’ MI reports.

Complex Trades

The UK regulator has noticed some inconsistencies in transaction reports involving complex trades, and expects all firms to continue to strictly apply the ESMA guidelines and recommendations.

  • Simultaneous buy and sell of 2 (or more) instruments quoted at a single price;
  • individual transaction reports submitted for each leg of the complex trade should be linked by the same complex trade component ID in field 40;
  • Field 33 must be populated with a single, identical price on both legs.

Control Now validates whether transactions reported within the same complex trade have the same price (CN validation reference M271).

Transmission Agreements

Article 26(4) of UK MiFIR and Article 4(1)(c) of RTS 22 relieves a transaction firm of the requirement to submit a transaction report, as long as certain predefined conditions are met.

One of these conditions is an agreement between the transmitting firm and the receiving firm. However, there have been scenarios where either firm has submitted the transaction report.

The FCA has seen examples where firms use this exemption without agreeing transmission with their counterparty.

The regulator encourages both transmitting and receiving firms to review their existing transmission arrangements to ensure all relevant conditions set by Article 4 of RTS 22 are met.

Inconsistent Price and Quantity Notations

In some cases, specific processes are expected.

  • Credit default swaps (CDS) – price in basis points;
  • Equity – quantity in units.

The UK regulator challenges firms to follow market convention when determining which notation to use and ensure they are consistent with the notations reported by their counterparties.

  • The FCA tests to ensure counterparties report the same information in price type and quantity type.

Control Now supports firms in reviewing the correct price and quantity notations by providing validations. Some of these validations are depicted below:

  • Quantity type: M118 (spread bets), M231 (CFDs), M247 (swaps), M275 (FX forwards);
  • Price type: M20 (options), M21 (spread bets) , M22 (CDS), M103 (index spreadbets), M137 (index options), M213 (index CFD), M249 (equity swaps), M274 (FX forwards).

Transactions Executed under the Rules of a Trading Venue

Firms were confused on how to populate the venue (field 36) and trading venue transaction identification code (TVTIC) when reporting transactions were negotiated off-exchange.

The FCA referred to section 5.4 Part I of the ESMA Guidelines on transaction reporting, stating that both parties should report the market identifier code (MIC) of the trading venue.

Control Now supports clients in reviewing the MIC and TVTIC population by providing the TVTIC MI that shows an overview of transactions reported across different venues and whether TVTIC was provided according to the requirements. We also validate missing TVTICs by M37a and M37b and correctness of Venue field by M36.

Looking through the Chain

Firms are not expected to look through a chain unless the transmission of orders meets the conditions of Article 4 of RTS 22.

The regulator has seen examples of misreporting:

  • Funds identified as counterparty when dealing with a fund manager;
  • Intragroup subsidiary client identified as counterparty when dealing with an intragroup entity.

Control Now supports client by executing validations M18 and M25 on the buyer and seller fields against provided clients and market counterparties list as well as providing more detailed breakdown in an MI report: Counterparty Analysis.

Reporting Instrument Details

The FCA has witnessed multiple variable data quality issues for transactions in financial instruments where instrument details must be populated in fields 42-56.

The UK regulator urges firms to ensure these fields are accurate and complete.

Control Now supports clients with instrument checks in multiple ways:

  • Price multiplier validations for contract types: M119 (spreadbets), M113 (depositary receipts);
  • Validations flagging where expiry dates are incorrect (M252) or missing where required (M112);
  • Validations of CFI codes:

-Where CFI codes are not consistent with other instrument details (M30, M32, M29, M260, M262, M54, M160, M132, M121, M19, M120, M108, M273, M272);

-Where CFI codes are not consistent with instrument name (M253, M254, M236).

  • 2 MI reports: Instrument Analysis MI and Instrument Description MI providing an overview on the traded instruments broken down by product types (including the interpretation of CFI meaning), ISINs and further instrument details.

If your business requires support with its regulatory reporting process, we would be very happy to help you. Contact us at


Control Now Ltd (2017), is a provider of Transaction Reporting software tools to empower market participants to perform oversight of their Regulatory Reporting Processes. Control Now Ltd accepts no liability for any loss or damage caused by use of or reliance on this information or any other information published by Control Now Ltd. Recipients of this information must perform their own due diligence to confirm the information is accurate and relevant for their business scenario. Control Now Ltd reserves its right to re-publish the information.