There are a few areas of regulatory compliance that, over the past 6 years, have created more frustration, angst and wasted hours than transaction reporting. Since the advent of MiFID II, buy-side firms have needed to report huge amounts of detail for each in-scope transaction on a T+1 basis. Confusion reigns over the interpretation and applicability of data items, and significant amounts of time and money have been spent trying to get it right. But in all probability, no firm has it 100% correct.
So, the data is at best incomplete and at worst simply wrong (requiring significant re-reporting often years after the fact) and add to that the fact that most of the transaction reports the FCA receive from the buy-side are duplicated by sell-side counterparties. Therefore, it is not surprising that many have been asking for a while, “What is the point?”
So, let’s start with that…
What is the point of transaction reporting?
In all the noise, the purpose of transaction reporting is often lost. Buy-side Transaction reporting is a vital tool of oversight for the FCA. Only 44% of Buyside data is covered by sell-side reporting, meaning a buy-side exemption would remove 56% of oversight, a huge blind spot for the FCA.
The consultation paper cites several examples where buyside data has been critical. During the 2022 gilt market turmoil, this data helped the FCA understand who was trading at the height of the crisis. Further, the FCA were able to quantify exposure to Russia-linked instruments being traded over the sanctions period 2022. More recently, this data allowed for rapid analysis of hedge fund activity following the April 2025 tariff announcements. The FCA has made it clear that losing this data would undermine market integrity and place crisis response at risk.
Consultation Paper 25/32 Improving the UK transaction reporting regime:
First up, the good news is that the exemption for CPMI (AIFMs with MiFID top up permissions) firms remains but, and here is the bad news, it won’t be extended to the buy side generally.
The two main aims of the FCA’s proposals are to reduce unnecessary duplication and maintain their ability to gain ‘actionable insights’ to inform their statutory objectives. They plan to reduce or remove reporting where “the overall cost of requiring the reports will not be offset by the benefit of the data.” As part of this, the FCA is seeking to increase use of the conditional single-sided reporting mechanism, under which a receiving firm can submit the transaction report on behalf of another firm (the transmitting firm). The regulator highlighted the very limited use of this approach by transmitting firms as far back as 2023 and want to make it easier to access.
On the “reduction” side, the FCA plans to cut the number of transaction reporting fields from 65 to 52, shorten the back-reporting period from 5 to 3 years, trim instrument reference data fields, and ease the reporting burden on trading venues. All positive moves, although they mainly chip away at the edges of an already heavy system.
For outright “removal,” the FCA wants to drop reporting for instruments traded only on EU venues, take FX derivatives out of scope due to EMIR coverage, and stop systematic internalisers from having to submit instrument reference data. These changes will help, but again, they stop short of the deeper overhaul many firms were hoping for.
What’s Judd saying?
Whilst cutting reporting fields, narrowing the scope of instruments, and simplifying reference data will help ease operational burdens, the regime will remain complex and resource intensive.
Overall, the FCA’s proposals mark steady progress on easing the transaction reporting burden, even if they fall short of the more sweeping changes many in the industry had hoped for. The UK is moving more quickly than the EU, dropping around six million EU-traded instruments from scope, and the EU is now taking a similar line by excluding UK-traded instruments from its own rules. The removal of FX derivatives will also deliver a notable cost saving, reflecting years of unclear guidance and the market’s inability to settle on a single reporting approach.
No action needed right now other than to flag that the proposed changes call for firms to begin rethinking their overall reporting framework. The priorities here are streamlining systems as the number of transaction and reference data fields shrinks, and reassessing workflows that currently support FX reporting and large back-reporting volumes. Be prepared for a shift in scope, with entire categories of instruments and FX derivatives dropping out of reporting altogether, and systematic internalisers no longer contributing reference data. Firms should treat this as an opportunity to review and refine their own processes to improve the quality and efficiency of the remaining reporting obligations.
At the same time, it’s obvious that technical limitations are shaping much of the reform. Congestion at ARMs when correcting historic trades has made fixes like direct amendments through ARMs or the MDP impossible. As a result, the FCA has opted for a practical workaround by reducing the correction window from five to three years. Ultimately, the direction of travel is being set as much by system constraints as it is by policy.
December 2025
