New Research Shows That 97% of Firms are Reporting Incorrectly Under MiFIR/EMIR

• 97% of reports under MIFIR/EMIR contain inaccuracies
• On average each report has 30 separate error types
• Despite this, 87% of firms are confident in the quality of their reports
• On the anniversary of EMIR REFIT, data quality is still poor 
   

New research from ACA Group, the leading governance, risk, and compliance (GRC) advisor in financial services, into the accuracy of transaction reporting under MIFIR/EMIR has shown that 97% of firms reviewed are currently reporting incorrectly. 

The research shows that most firms (87%) are confident in the quality of the reports that they submit to regulators via Approved Reporting Mechanisms and Trade Repositories under MiFIR and/or EMIR, with many assuming that no direct contact from the FCA means that all must be well.

However, analysis of the data shows that firms’ reports featured, on average, over 30 separate error types. Suggesting that this is not just a case of a single mistake affecting all reports – it is 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. 

Matt Chapman, Managing Director and Co-Lead of the ACA’s Regulatory Reporting Monitoring & Assurance (ARRMA) Service, ACA Group, said: “There is clearly a gap between perception and reality when it comes to transaction reporting. Nearly 87% of respondents in our recent survey said they were confident their transaction reporting is 100% accurate and timely. Yet, our analysis shows that it is highly likely the reports in question would have contained errors. 

“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.” 

Notes:

• EMIR REFIT anniversary is 18 June – learn more here. 
• 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. 
• Results based on a sample of 31 firms, one of which did not have any errors that we identified.

How we help

Our transaction reporting specialists are on hand to help your firm identify failings in the completeness, accuracy, and timeliness of your trade and transaction reports.  

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Click here to book a free transaction reporting review to help identify problems in your regulatory reporting before the regulator does. This includes a summary report identifying, among other things, the percentage of reports submitted that include an error and the number and type of errors affecting those reports.   

With ACA Regulatory Reporting Monitoring & Assurance (ARRMA) support, firms benefit from a service offered by no other firm; a unique blend of technology and consulting that identifies transaction reporting errors and provides practical advice/support to resolve them.  ​​​​​​