FCA Releases FOI Requests Info on Director Investigations and Reporting Errors

Published On September 17, 2019

17 September 2019: The UK Financial Conduct Authority released some interesting data that was requested by individuals under the Freedom of Information Act 2000 (the Act) on 29 March 2019, for the following information: 

Question 1) How many investigations did the FCA launch into company directors in 2018 (year to Dec 31 2018)?

Q2) A breakdown of the types of investigations launched, using whichever categories are used internally.

Answer 1) FCA took “company directors” to mean those individuals who have held CF1 (Director) or CF2 (Non-Executive Director) functions at any point; they may not have held those functions at the time of the investigated misconduct. In total there have been 58 investigations launched.

A2) A breakdown of the types of investigations launched, the categories used internally. Category: Client money/assets – 3; Retail conduct – 10; Culture/governance – 27; Financial crime – 3; Financial promotions – 2; Insider dealing – 2; Mis-selling – 3; Application to revoke/vary permission or approval – 2; Wholesale conduct – 6. Total = 58 

Another FOI request was made on 4 March, for information concerning MiFID II/MiFIR transaction reporting errors and omissions. 

The transaction reporting regime, set out in Regulation (EU) 600/2014 (MiFIR), requires investment firms to report to their competent authority details of reportable transactions in financial instruments. The FCA currently receives a daily average of 32 million transaction reports from UK firms. As per the legislation, UK investment firms and trading venues are required to notify the FCA promptly where they identify errors or omissions within their transaction reports. As FCA was not able to break the information down by month within the cost limit, it provided the information for the year 2018 as per the request: 

Q1. How many MiFID II/MiFIR transaction reporting errors and omissions notifications has the FCA received since 3 January 2018? 

Q2. What is the average number of transactions impacted across all reports? 

Q3. What percentage of transaction reporting errors and omissions have stemmed from under-reporting? 

Q4. What percentage of transaction reporting errors/omissions have stemmed from overreporting? 

Q5. What percentage of transaction reporting errors and omissions have stemmed from erroneous content?

A1. 335 error and omission notifications were received by the FCA in 2018.

A2. FCA unable to quantify this or respond.

A3. 27% 

A4. The term over-reporting is used where an investment firm attempts to report a transaction on a non-reportable financial instrument. Over reporting is prevented automatically by the Market Data Processor (MDP) as transaction reports submitted where the financial instrument is not available in the instrument reference data database are held in pending status. If after 7 calendar days, the instrument is still not available, the transaction report is rejected. 

A5. 73%