The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

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

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.

Related content

WEBINAR

Recorded Webinar: Entity identification and client lifecycle management – How financial institutions can drive $4 billion in cost savings

A new model in Legal Entity Identifier (LEI) issuance has created significant opportunities for financial institutions to capitalise on their KYC and AML due diligence. By becoming Validation Agents and obtaining LEIs on behalf of their clients, financial institutions can enhance their client onboarding experience, streamline their internal operations, and open the door to new,...

BLOG

2021 Predictions: Change is Afoot

By Marc Murphy, CEO, Fenergo. It almost feels like the financial industry went to bed in March 2020 and woke up in 2030. Prior to the pandemic, financial institutions had been falling behind when it came to digital transformation, only increasing resources when absolutely necessary. But now, the pandemic has forced financial institutions to make...

EVENT

RegTech Summit Virtual

The RegTech Summit Virtual is a global online event that will be held in June 2021 with an exceptional guest speaker line up of RegTech practitioners, regulators, start-ups and solution providers to collaborate and discuss innovative and effective approaches for building a better regulatory environment.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...