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Market Watch 82

/ Metadata
Date: 23.07.2025
Type: News
Regimes: EMIREMIR REFITEMIR UKMiFIRSFTR
Categories: Market WatchMiFIDMiFID IIIMiFID IIFCA
/ Article

On 23rd July 2025, the FCA published Market Watch 82. This edition discusses "recent observations from supervising the UK MiFID transaction reporting regime."

Background

  • The FCA has seen "persistent inefficiencies" regarding reporting under MiFID which suggests some firms must improve their operational frameworks.

  • Firms should be proactive and transparent during the remediation process.

  • 241 breach notifications were received by the FCA in Q1 2025 and it will continue to monitor the quality of breach notifications. The FCA has also introduced a quality flag to help with this.

Summary

The FCA has seen remedial exercises taking longer than due to:

  • Taking excessive time to present a remedial plan or implement corrective actions.

  • Missing deadlines set by internal governance bodies or the FCA.

  • Requesting extensions without justifiable reasons.

  • An absence of measurable progress between regulatory check-ins.

  • Repeatedly revising root causes or impacted volumes of transaction reports.

The FCA has identified common themes in root cause(s) for remedial work:

  • Internal processes: Siloed teams, fragmented ownership of tasks and lengthy approval chains slow down decision making.

  • Resourcing: Assigning insufficient resource to resolve issues effectively and competing business priorities result in slower response times.

  • Difficulty in tackling the root cause: Focus on fixing the symptoms rather than the root cause leads to issues resurfacing.

  • Compliance culture: Reactive culture results in firms addressing issues only when prompted.

  • Governance: Weak structures and lack of accountability lead to loss of momentum as remedial work is not managed centrally or treated with urgency. 

The FCA received 241 breach notifications during Q1 2025. The table below summarises observations and best practices.

SectionAnalysis ResultsBest Practice
Issue description83% of notifications provided a clear description of the issue identified
  • Specify the nature of the issue: misreporting, under reporting, late reporting.
  • Provide detail that can be understood without firm context, avoiding references to internal systems.
  • Make the description relevant and succinct.
     
Root cause description76% of notifications provided a clear account of the root cause(s)
  • Consider how your root cause relates to the common root causes we discussed in Market Watch 81 and link the description.
  • Example: In cases where a firm is inclined to attribute the root cause to human error, consider whether improvements in process, controls or oversight would have prevented the issue before it happened.
Impacted transactions
  • 85% of notifications provided the exact volume of transactions impacted
  • 8% provided an approximate volume
  • 7% did not provide a figure (2% without justification)
  • Where this information is not available at the point of submission, explain this in the notification and do not delay submission.
  • Where the impact assessment is ongoing, indicate when it will be completed.
  • Clarify whether the impacted volume and relevant period provided is exact or approximated.
Relevant period
  • 74% of notifications provided a precise relevant period
  • 21% offered an approximation
  • 5% did not provide a relevant period (3% without justification)
Back reporting planning
  • 76% of notifications specified a date for back reporting commencement
  • 9% offered an indicative date
  • 15% provided no indication on back reporting planning
  • Provide insight to work required to determine back reporting timelines rather th
Details relating to weaknesses in systems and controls
  • 66% of notifications provided clear and relevant information on weaknesses in systems and controls
  • 31% provided inadequate details
  • 3% left this section blank
  • Demonstrate the link between the reported issue and the root cause. If an issue has crystalised it is likely due to a weakness in systems and controls.
  • Provide information specific to the reported issue and avoid generic comments on overall improvement of transaction reporting processes and controls.
  • Provide rationale where this section is deemed not applicable.
  • Example: In cases where a firm is inclined to attribute the weakness to a third-party vendor, consider whether vendors specific controls and oversight would have prevented the issue before it happened.
Details of plans to address issue
  • 75% of notifications provided clear and relevant information regarding details of plans to address weakness
  • 16% provided inadequate information
  • 9% left this section blank
Details of governance committee aware of the issue
  • 80% of notifications provided sufficient information
  • 18% provided inadequate information by indicating escalation but not specifying the relevant forum
  • 2% left the section blank
  • Provide details of the committee, forum or individual to which the issue has been escalated.
/ Market Watch

Next steps

  • Firms must embed robust, well-governed processes such as remedial timelines, back reporting, transaction reporting errors and omissions notifications (i.e breach notifications) for identifying, correcting and disclosing transaction reporting issues.

  • The FCA does not expect these recommendations to create additional burdens but rather to support efficient and compliant reporting.

The full Market Watch 82 edition can be found here - https://www.fca.org.uk/publications/newsletters/market-watch-82

If you're struggling with any of the challenges mentioned above such as back reporting, get in touch. Our team of experts are on hand, ready to advise - learn more here.