Supervisory flexibility on transaction reporting

On July 27, 2023, the Financial Conduct Authority, FCA, has published a press statement concerning transaction reporting requirements of trading venues and investment firms. The FCA thereby notes the following:
In January 2022, temporary measures were enacted concerning the reporting of the short selling indicator under UK RTS 22. These measures ensured that firms failing to report the indicator would not face consequences, pending a decision on the indicator’s future.
Presently, additional temporary measures are being introduced for the reporting of specific fields in transaction reports. These fields include
– the waiver indicator (field 61),
– the OTC post-trade indicator (field 63),
– the commodity derivative indicator (field 64), and
– the securities financing transaction indicator (field 65).
While these fields are under review, non-compliance to provide a value in the reports will not result in penalties, and firms are not obligated to utilize error forms to report any issues concerning those fields.
Starting September 2023, the FCA will deactivate the validation rules CON-610 and CON-640 to prevent the rejection of transaction reports due to inaccuracies in the aforementioned fields.
Furthermore, an update to the UK MiFIR transaction reporting schema is planned to encompass all alphanumeric values for the waiver and OTC post-trade indicators. This adjustment facilitates the inclusion of „new trade reporting flags introduced in PS23/4“. It’s important to note that firms opting not to adopt this alteration will not be subject to punitive actions.
Detailed guidance regarding the implementation of the new schema will be communicated to MDP (Market Data Processor) submitting entities ahead of the enactment of the new regulations stemming from PS23/4.