Transaction reporting is a highly complex area that many firms struggle to fully understand and successfully implement, as demonstrated over the years by a number of high profile enforcement cases. The FCA and current EU regulatory developments are putting further strain on firms to ensure that their transaction reporting procedures are watertight and that reports made are accurate and complete. Fines for transaction reporting failures lead to reputational damage and in many cases costly reviews in the form of s166 Skilled Persons reports. We have also seen a proliferation of firms and their senior management being required to sign attestation letters issued by the FCA with regard to confirming the accuracy and completeness of their transaction reports.
Due to the regulatory changes and complexity of financial instruments and how they are traded, specialist skills are required to review transaction reporting arrangements. MiFID II/MiFIR developments, changes to OTC derivatives reporting and enhanced business validation rules are all aspects that firms need to consider. As the FCA steps up its monitoring, the pressure is on firms to ensure their transaction reporting meets the “complete and accurate” demands of the FCA.
Whether you are facing FCA action or simply require some independent and expert assurance that your current transaction reporting arrangements meet the required standards and forthcoming changes, Duff & Phelps can offer a highly skilled review and assurance service to minimize your potential regulatory risk. Our transaction reporting specialists have over 20 years’ experience of working at the FCA’s Transaction Monitoring Unit (TMU), combined with extensive experience of working within and providing consulting services to investment banks, brokers, platform providers, asset managers, exchanges and multilateral trading facilities (MTFs).
Whether you are a smaller firm looking for a subject matter expert or an investment bank looking for assistance with reporting your complex derivatives, our specialist staff can help you assess whether your transaction reporting arrangements are robust. We tailor our practices to the trading activities and processes of our clients and assist them with all applicable aspects of transaction reporting, including:
- One off or annual health check assessments
- Assist firms and senior management to gain assurance to sign a transaction reporting attestation letter with confidence to the FCA
- Deep-dive reviews and regulatory investigations
- Preparation for visits from regulators to review transaction reporting
- Regulatory reform implementation and guidance including MiFID II/MiFIR
- Manage or assist with transaction reporting quality reform programs
- Capturing and documenting the reporting requirements specific to your trading scenarios and product mapping across all systems
- Apportionment of responsibility and accountability
- Review and guidance on effective oversight and control mechanisms
- Documentation (policies, operational procedures and reporting logic)
- Develop front to back quantitative and qualitative reconciliations of your transaction reports to the regulator
- Creation of a tailored test pack (transaction reporting control matrix)
- Independent data accuracy testing of all instruments, scenarios and data fields
- Effective change management controls
- Preparation and delivery of technical, regulatory and operational staff training across departments