UK’s FCA predicted to ramp-up non-compliance fines in 2020
20 December 2019 London
Image: Shutterstock
The UK’s Financial Conduct Authority (FCA) is expected to “dramatically increase” its scrutiny of reporting data quality with a specific focus on MiFIR and EMIR, according to reporting service providers.
The UK’s market watchdog has already stepped-up its oversight of firms’ compliance with the second Markets in Financial Instruments Directive (MiFID II) since it first went live in 2018.
Matt Smith, CEO of SteelEye, a London-based regtech and data analytics provider, stated in his 2019 round-up blog post that, following the implementation of MiFID II there was a “plethora of accompanying data challenges”.
Smith added that in the first year MiFID II came into force, more than 1,000 investment firms reported having misreported their transactions, adding that “the regulator was somewhat forgiving on data accuracy, allowing firms some leeway to get their houses in order”.
However, in 2019, FCA began to turn the screw on those still not meeting the required standards of data reporting, handing out “hefty” fines for non-compliance, including a £27.6 million fine handed to UBS and a £34 million given to Goldman Sachs for misreporting.
According to Smith, this harder stance by the regulator is “only set to intensify in 2020”.
“It is no longer an option for firms not to prioritise their data quality,” he stated. “Poor data management practices also mean that compliance not only becomes time-consuming and extremely costly but an ever-increasing business risk.”
This prediction was reinforced by the CEO of Kaizen Reporting, which offers reporting services for MiFIR, EMIR and the Securities Financing Transactions Regulation (SFTR), among others, via its ReportShield platform.
Also in a 2019 round-up blog post, Dario Crispini, who has been at the helm of Kaizen since 2013, said: “Looking ahead to 2020 we expect to see a dramatic increase in the level of scrutiny from the FCA with a particular focus on data quality for both MiFID and EMIR.”
To meet the challenge posed by increased scrutiny, Kaizen has increased its team by 60 percent in the past year, including the appointment of Tony Weedon from J.P. Morgan, who will focus on repo and securities lending markets and will join the firm’s SFTR team in Q1 2020.
The UK’s market watchdog has already stepped-up its oversight of firms’ compliance with the second Markets in Financial Instruments Directive (MiFID II) since it first went live in 2018.
Matt Smith, CEO of SteelEye, a London-based regtech and data analytics provider, stated in his 2019 round-up blog post that, following the implementation of MiFID II there was a “plethora of accompanying data challenges”.
Smith added that in the first year MiFID II came into force, more than 1,000 investment firms reported having misreported their transactions, adding that “the regulator was somewhat forgiving on data accuracy, allowing firms some leeway to get their houses in order”.
However, in 2019, FCA began to turn the screw on those still not meeting the required standards of data reporting, handing out “hefty” fines for non-compliance, including a £27.6 million fine handed to UBS and a £34 million given to Goldman Sachs for misreporting.
According to Smith, this harder stance by the regulator is “only set to intensify in 2020”.
“It is no longer an option for firms not to prioritise their data quality,” he stated. “Poor data management practices also mean that compliance not only becomes time-consuming and extremely costly but an ever-increasing business risk.”
This prediction was reinforced by the CEO of Kaizen Reporting, which offers reporting services for MiFIR, EMIR and the Securities Financing Transactions Regulation (SFTR), among others, via its ReportShield platform.
Also in a 2019 round-up blog post, Dario Crispini, who has been at the helm of Kaizen since 2013, said: “Looking ahead to 2020 we expect to see a dramatic increase in the level of scrutiny from the FCA with a particular focus on data quality for both MiFID and EMIR.”
To meet the challenge posed by increased scrutiny, Kaizen has increased its team by 60 percent in the past year, including the appointment of Tony Weedon from J.P. Morgan, who will focus on repo and securities lending markets and will join the firm’s SFTR team in Q1 2020.
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