Almost all firms incorrectly reporting transactions under MiFIR, report finds  

ACA report found that almost all firms surveyed were reporting their transactions incorrectly under MiFIR/EMIR with 87% of them unaware they are doing so.

Close to 100% of firms are incorrectly reporting trades and transactions as required under MiFIR and are unaware of the errors, according to research from financial services advisor ACA Group.

A survey of 31 firms found that 97% of their reports contained inaccuracies and 87% were confident in the quality of the reports they were submitting to regulators vis approved reporting mechanisms (ARMs) and trade repositories. 

Under EMIR, firms in the EU must report all over the counter (OTC), exchange-traded, cleared and non-cleared derivatives transactions to registered trade repositories.

On average reports featured over 30 separate error types, which ACA Group said suggested a widespread misunderstanding across the industry following regulatory changes, as opposed to a case of a single mistake. 

“There is clearly a gap between perception and reality when it comes to transaction reporting, ” said Matt Chapman, managing director and co-lead of the ACA’s regulatory reporting assurance service. Regulators have repeatedly described complete and accurate reporting as a common good as well as their growing frustrations that firms aren’t getting it right.

“As a result, they are making no bones about the fact that they expect prompt and significant improvement. Although lack of public enforcement action in relation to MiFIR and EMIR reporting may have lulled some firms into a false sense of security, they must be prepared for this to change in the months ahead, or face the consequences.” 

A non-standardised approach to regulatory reporting has led to confusion and errors in the past. In March last year, several major trade associations banded together to publish a set of guidelines aimed at standardising reporting of derivatives transactions under the EMIR Regulation.

The publishing of the new guidelines followed research from 2019 that showed that the matching rate was just 40% for EMIR reporting as many firms were completing data fields differently and this was leading to major matching errors on individual trades.