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Report calls for more focus on transaction reporting

Regulatory reportingFinancial firms are not prioritising their transaction reporting process despite concerns about systemic risk and regulatory penalties as a result of inaccurate reports.

The warning comes from compliance advisory firm ACA Group which found that only 19% of firms identified trade and transaction reporting as a major compliance challenge for 2022.

This is despite the fact that the European Securities and Markets Authority issued a €186,000 fine last year to REGIS-TR, the EU’s second largest trade repository, for failing to provide access to derivative contract details as required under EU regulations.

Earlier research published by ACA Group in February also found a high level of inaccuracy in the reporting. It found that 97% of reports contained errors. Yet worryingly, 87% of firms were confident in the quality of their reporting when asked.

This figure has dropped significantly, according to the latest research, which was welcomed by ACA Group’s managing director and co-lead of its regulatory reporting monitoring and assurance service, Matt Chapman.

“It is good to see a downturn in the overconfidence that so concerned us in last year’s report. But there remains a dangerous lack of understanding or prioritisation around the current processes required to meet MiFIR/EMIR standards.

“The longer it takes firms to realise they have a problem, the more expensive and time consuming it becomes to fix, and the more embarrassing the conversation with the regulator becomes,” added Chapman.

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