Research from ACA Group, a governance, risk, and compliance (GRC) advisor in financial services, shows that 97% of reports under MIFIR/EMIR contain in accuracies.
The analysis fund that on average each report has 30 separate error types. However, despite this 87% of the 31 firms canvassed are confident in the quality of their reports that they submit to regulators via Approved Reporting Mechanisms and Trade Repositories under MiFIR and/or EMIR.
This suggests that it is not just down to a case of a single mistake but a potential indication of widespread misunderstanding of how certain reporting requirements apply to firms and their activities, particularly when arrangements and activities change.
Transaction reporting plays a fundamental role in market abuse surveillance and regulatory attention on data quality and timeliness is expected to increase in 2021 and beyond.
The data shows that, even 12 months on from the EMIR REFIT, data quality is still poor as firms struggle to implement best practise, fully identify how reporting fields need to be populated differently to reflect different trading scenarios, identify and correct errors and collaborate effectively with third parties delivering their reporting.
Findings are based on analysis of firms using ACA’s Regulatory Reporting Monitoring & Assurance (ARRMA) Service and poll findings taken at our 2021 European Regulatory Horizon Conference.
“There is clearly a gap between perception and reality when it comes to transaction reporting, “said Matt Chapman, managing director and co-lead of the ACA’s Regulatory Reporting Monitoring & Assurance (ARRMA) Service, ACA Group.
He added, “Getting trade and transaction reporting right is going to continue to grow in importance over the next 24 months. Regulators have repeatedly described complete and accurate reporting as a common good as well as their growing frustrations that firms aren’t getting it right. As a result, they are making no bones about the fact that they expect prompt and significant improvement.
Although lack of public enforcement action in relation to MiFIR and EMIR reporting may have lulled some firms into a false sense of security, they must be prepared for this to change in the months ahead or face the consequences.”
©Markets Media Europe 2021
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