FCA consults on UK transaction reporting reforms

The Markets in Financial Instruments Regulation (MiFIR) transaction reporting regime has become increasingly complex with operational inefficiencies, high costs and data quality risks. In CP25/32, the FCA aims to simplify the reporting landscape, in line with its broader agenda to streamline regulation and reduce the cost of compliance. When implementing these changes firms need to maintain good practice, as outlined in Market Watch 81, preserving a robust and transparent control environment.

CP25/32: key proposals at a glance

The FCA’s consultation sets out reforms intended to simplify transaction reporting and reduce unnecessary burden. While the proposals promise clearer responsibilities and reduced duplication, firms will need to reassess systems, data flows and governance arrangements. Early action may support effective implementation, while delays could result in compressed timelines, operational disruption and increased regulatory scrutiny.

The proposals focus on three main areas, as outlined below. 

1. No broad buy-side exemption 

The FCA has confirmed it will not introduce a broad buy-side exemption, with the following reasoning: 

• Only 44% of buy-side submissions in 2024 duplicated sell-side reports – removing buy-side reporting would therefore eliminate visibility over more than half of reported activity.
• Many UK buy-side firms trade on behalf of non-UK funds, meaning sell-side reporting is not always available to the FCA.
• Certain sectors would lose visibility over 40–50% of corporate bond volumes without buy-side data.
• Buy-side reporting remains important for monitoring gilt and sterling corporate bond markets and for supervisory analysis of hedge fund and Commodity Trading Advisor (CTA) activity.

In addition to the above, Collective Portfolio Management Investment firms remain excluded, and no new de minimis threshold is proposed.

2. Replacement of the reception and transmission model

The FCA aims to replace the current reception and transmission framework with a conditional single-sided reporting model. Moving forward transmitting firms will only provide four mandatory fields – client details, decision-maker (where applicable), the transmitting firm code, and details on trading capacity. Receiving firms will complete the remaining fields, removing duplication of data already known at execution. This model will apply across all trading capacities, including dealing on own account and matched principal trading. Decision-maker details within the transmitting firm will only be provided upon request.

Responsibility for data will be split – sending firms will be accountable for the fields they transmit, and receiving firms accountable for all others.

3. Scope and instrument eligibility changes

Other proposed changes include:

• limiting reportable instruments to those traded on UK venues
• only reporting EU-only derivatives where the underlying instrument is traded on a UK venue 
• removing FX derivatives from the scope of UK MiFIR reporting
• treating the FCA’s Financial Instruments Reference Data System (FIRDS) as the definitive source for
• instrument eligibility (with regulatory protection where firms reasonably rely on it) 
• retaining over-the-counter (OTC) International Securities Identification Numbers (ISINs)
• reducing the back-reporting period to three years
• replacing the concept of a complex trade with package transactions. 

Market Watch 81: governance and control expectations remain unchanged

While CP25/32 focuses on simplifying the transaction reporting framework, the FCA has been clear that simplification does not reduce expectations around governance, data quality or control effectiveness. As firms embed these new processes, they should assess how the new reporting environment can support good practice, as outlined in Market Watch 81, with key considerations including:  

• Maintaining effective governance and oversight – for example by reconciling Suspicious Transaction and Order Reports (STORs) to transaction reports (with appropriate segregation of duties), and documenting ownership of reporting logic, controls and issue escalation.
• Ensuring data quality and controls – with pragmatic reconciliation processes, appropriate data enrichment, regularly reviewed exclusion files and transaction reports sourced from appropriate execution records.
• Ongoing assessment of how change management processes affect transaction reporting, including inherent weaknesses in certain trade flows (such as reliance on sponsored access clients for accurate data). 
• Ensuring the operating model aligns with the size and scale of the business,.

Getting started

CP25/32 represents a significant step in the FCA’s efforts to streamline UK transaction reporting while maintaining supervisory effectiveness. With Market Watch 81 best practice in mind, firms can consider five key actions to streamline their reporting processes, in line with CP25/32 adoption: 

• Conduct a gap analysis to map reporting chains and data flows across all systems, booking models and trading scenarios (this should include fields that are no longer needed and system or control changes).  
• Ensure client and decision-maker data is complete, accurate and readily accessible, with effective reference data governance and validation controls. 
• Reassess reconciliation and governance frameworks to document data lineage, maintain data dictionaries, and reassess whether existing reconciliation processes provide sufficient assurance across the reporting lifecycle. 
• Review the instrument eligibility processes and update reference data workflows to align with FCA FIRDS and ensure systems can determine instrument scope efficiently. 
• Enhance testing, change management and third-party oversight frameworks to make sure they’re fit for purpose.  
• Assess how EU divergence will impact operations for the UK business, and establish consistent processes across all locations.  

The consultation is open for feedback until 20 February 2026, with the final rules expected later this year. Given the complexity of current reporting structures, a large-scale change programme of this kind will take time and early action can support a smooth transition, with minimal operational disruption.  

For further information on transaction reporting, contact Rashim Arora or Rebecca Deane.