About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

UK FSA Contemplates Mandating the Introduction of Data Governance Staff and Systems

Subscribe to our newsletter

In keeping with its increased focus on the data details of firms’ transaction reports, the UK Financial Services Authority (FSA) is now contemplating mandating that firms appoint a data governance officer and introduce a data assurance programme to ensure that standards of data quality are being maintained. This is all part of its more intrusive approach to regulating the financial markets, which could also involve the introduction of annual systems and controls confirmations for transaction reporting, according to Dario Crispini, manager of the Transaction Reporting Unit of the FSA.

Speaking at the MiFID Forum’s Transaction Reporting Subject Group meeting last week, Crispini warned attendees that along with tighter scrutiny of instrument and entity identification, firms may also be facing a direct mandate for data quality assurance. This should prove pleasing news for those in the data management function, as it would give further grounds for investment in systems and staff at a time of great pressure to drive down costs.

The group also discussed the relative progress within the UK compared to the rest of Europe with regards to transaction reporting, including data standardisation. Alan Jenkins, independent consultant and chair of the recently formed subject group, explains that out of the five main changes included in the Committee of European Securities Regulator’s (CESR) proposals, only two will affect regulated firms in the UK. The two being one related to trading capacity, where ‘principal for client facilitation’ is replacing ‘riskless principal’, and standards for client identification. The fifth point, around transaction reporting for unregulated firms, will now be an obligation on regulated markets and multilateral trading facilities (MTFs).

In terms of client and counterparty identification, CESR had the opportunity to pick from one of four levels of standardisation: European, national, firm or desk level. The regulator has therefore selected national level and asked individual national regulators to decide on the identifiers that must be used for transaction reporting within their jurisdiction. Accordingly, the FSA is keen for firms to use Bank Identifier Codes (BICs) for client and counterparty identification whenever possible.

Jenkins adds that the FSA has indicated its wish to involve the MiFID Forum subject group in its further consultations, along with feedback from other interested parties before implementation.

During the more general MiFID Forum event at the end of last week, the topic of data standards was a popular one, with many speakers stressing the need for a more consistent approach. Ian Cohen, chairman of the Association for Financial Markets in Europe (AFME) and managing director and global head of business strategy, market structure and business for equities sales and trading at HSBC, for one, stressed the need for a commonly applied, single interpretation of data standards for consistency of data across financial institutions.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: How to leverage Generative AI and Large Language Models for regulatory compliance

Generative AI (GenAI) and Large Language Models (LLMs) offer huge potential for change across capital markets, not least in regulatory compliance where they have the capability to help firms understand and interpret regulations, automate compliance, monitor transactions in real time, and flag anomalies in the same timeframe. They also present challenges including explainability, responsibility, model...

BLOG

CTM Debuts New Tri-Party Matching Workflow for Prime Brokers with Société Générale as First to Go Live

The Depository Trust & Clearing Corporation (DTCC), the leading provider of post-trade market infrastructure for the global financial services industry, has announced Société Générale as the first Prime Broker to adopt the Central Trade Manager’s (CTM) automated tri-party trade matching workflow. This development comes as the financial services sector worldwide braces for T+1 and more...

EVENT

ESG Data & Tech Summit London

The ESG Data & Tech Summit will explore challenges around assembling and evaluating ESG data for reporting and the impact of regulatory measures and industry collaboration on transparency and standardisation efforts. Expert speakers will address how the evolving market infrastructure is developing and the role of new technologies and alternative data in improving insight and filling data gaps.

GUIDE

Institutional Digital Assets Handbook 2023

After initial hesitancy, interest in digital assets from institutional market participants has grown over the past three to four years. Early focus inevitably centred on the market opportunities presented by bitcoin and other cryptocurrencies. But this has evolved into a broad acceptance of a potentially meaningful role for digital assets in institutional markets. It’s now...