Information on transaction reporting under MiFIR - May 2022

None.

Transaction reports play a key role in our ability to conduct effective market oversight. We use them to detect, investigate and prevent market abuse, combat financial crime, support conduct supervision, and contribute to the work of other regulatory authorities. The completeness and accuracy of the information is crucial.

Since the MiFID II transaction reporting regime was implemented on 3 January 2018, we have received over 30 billion transaction reports. We have been working with firms to improve the quality of the data we receive. Where errors or omissions are identified, we require firms to correct and resubmit affected reports. Approximately 6 billion reports have been corrected since 2018. We place a strong emphasis on the importance of firms having effective systems and controls to identify and remediate data quality issues proactively. 609 firms made a data extract request from our MDP Entity Portal in the first three months of 2022, more than in the entire year of 2018 (451 firms). These data extracts are used by firms to reconcile the completeness and accuracy of their transaction reports with front office records.

We have been encouraged by improvement in data quality, and by the improved recognition demonstrated by firms of the importance of an effective transaction reporting systems and controls framework. We expect this progress to continue. However, where firms make no meaningful effort to comply with requirements or fail to act on our observations regarding data quality, including those set out in our Market Watch newsletters, we take a robust approach. Where we suspect serious misconduct has occurred, we will open an investigation to find out what happened, in order to determine what action to take, if any, including enforcement action. We do not take a strict liability approach. This means we do not investigate, for example, errors affecting a single transaction report, where they are not likely to cause harm to market integrity or to confidence in the financial system, and it is clear to us that the firm taking appropriate steps to comply with its obligations.

In 2019, we fined UBS AG £27.6 million, and Goldman Sachs International £34.3 million for transaction reporting failures. These outcomes will have sent a clear message to firms about the consequences of not having effective systems and controls in place to report transactions in an accurate, timely and comprehensive way.

None. Please see our above response to Q1. Investigations into transaction reporting failings that took place before 3 January 2018 were opened under the MiFID I regime.

Please see the table below. These figures do not include independent external reviews initiated proactively by firms. We routinely observe firms engaging the support of skilled persons voluntarily to identify and remediate transaction reporting errors and omissions.

Following the publication of ‘Our Mission’ in 2017, we received a significant number of responses setting out a variety of views on our use of private warnings, and whether they are consistent with our desire to be more transparent. We considered this feedback carefully. We have not issued any private warnings since then and intend to consult more fully on how we use them.