Regulatory Reporting
FCA found 139 MiFID firms failing to report transactions in 2024
• 0 minute read
January 29, 2025

The UK Financial Conduct Authority (FCA) found 139 Markets in Financial Instruments Directive (MiFID II) firms potentially failing to report transactions in 2024. However, it does not know the number of firms that should be reporting transactions but are not.
In all, the FCA assessed 185 instances of potential unreported transactions at those 139 firms, as some firms may have failed to report transactions more than once.
“We do not know the exact number but continue to conduct proactive investigatory work to identify these firms. Some, but not all, of the [139] firms identified [in 2024] had been submitting transaction reports but failed to submit a subset of their transaction reports. Other instances will relate to a complete failure to submit transaction reports,” said an FCA spokesperson.
In an overall population of 2,871 authorised UK investment firms, the FCA has identified 1,531 as an executing entity in a transaction report submitted to the authority. Not all UK investment firms would be executing entities, it said in a Freedom of Information Act response (FOI11911).
Sign of wider failures
“The evidence of failure to transaction report would be taken by the FCA and used to investigate further that firm, and typically, what theyʼll dig up will be much more important. The failure to report transactions are more a consequence of wider compliance failures, and it could result in a broader investigation into the firm,” said Dario Crispini, chief executive at Kaizen, global compliance and regulatory reporting experts in London.
Indeed, firms that have never reported under MiFID II tend to be unaware of the regulation, which was applied in 2018. Some firms lack proper control frameworks, or in other cases believe they are reporting through a vendor but are not. Staff turnover or cutbacks in the compliance function also contribute to firms failing to report.
The FCA has used its voluntary requirements (VREQ) and own initiative (OIREQ) powers on firms that, among other things, have failed to submit transaction reports, said a spokesperson. One example is City & Merchant Limited, which the FCA subjected to a VREQ in January 2024 for reporting and other failures, and then ordered it to cease all regulated activities that June.
Not performing reconciliations
The FCA also found between January 1, 2020 and December 31, 2024, that 1,076 out of 1,531 firms accessed its Market Data Processor (MDP) entity portal to request a transaction reporting data extract. This indicates some 450 firms have failed to comply with regulatory technical standard 22, article 15(3), which requires firms to check MiFID transaction reports for accuracy and completeness. Part of this requires them to conduct regular reconciliations of front office trading records against data samples provided by the FCA’s MDP.
The FCA wrote to 45 firms between 2022 and 2024 to enquire about Article 15(3) of RTS 22 compliance, it said in FOI11911.
“It would be an easy win for the FCA to write letters to all those firms and ask what they are doing. Some firms may be using [approved reporting mechanism] data to verify whatʼs been submitted to perform their assessments of reporting accuracy, but the FCA has been clear that it would expect firms to use extracts from the MDP,” said Crispini at Kaizen.
Actions taken
The FCA is currently conducting one enforcement investigation related to MiFID II transaction reporting failures, which Crispini found surprising.
“Reporting has improved substantially across the industry since 2018, and large efforts have been made by firms to ensure their reporting is accurate and complete. There are still pockets of very poor reporting, but the expectations from the regulator in terms of what constitutes appropriate, acceptable levels of reporting have increased,” he said.
“They expect better quality reporting now, particularly given the maturity of the regime. The fact that we havenʼt seen a fine for MiFID II reporting breaches is very surprising. This can be potentially viewed through the lens of Brexit and the FCA using other tools to ensure firms are reporting correctly,” he added.
The FCA commissioned five skilled persons reviews into potential transaction reporting failures between January 1, 2020 and December 31, 2024, it said in FOI11911.