The FIX Trading Community, the industry body that governs the world’s trading language, the FIX Protocol, has called for changes to UK financial rules as part of its responses to the FCA’s consultation on the UK joint tape (CP25/31), and transaction reporting (CP25/32).
Chief executive Jim Kaye said both discussions highlighted concerns about trade transparency which, if resolved, could improve UK market data and allow investors to interact with confidence and presence in the UK.
“FIX has been of the view that the UK could benefit from greater alignment with EU reporting rules, reducing complexity and improving efficiency, and reducing the reporting burden,” he said. “These two deals are a great opportunity to drive the UK market in this direction.”
An integrated UK database for equities, to be launched in 2027, will provide better access to UK market data. FIX has made a number of recommendations on the tape plan, which aim to address regulatory gaps, improve clarity around compliance, and remove post-Brexit transfer reporting. They include:
- Reconciling the current trading transparency releases in non-performing transactions is equivalent to off-book on-exchange trading.
- Remove the requirement to report, in the UK, businesses that are already reported by the EU APA.
- adding an indication of the trade execution method (manual vs. automatic) with the FIX field ExecMethod(2405) for all off-site trade reports.
- Clarify through regulatory guidelines that when supply chains are involved in business, business reporting should be done by the implementing party or its direct partner.
- Clarify through regulatory guidelines that when reporting an offshore transaction in a cross-border ledger, the transaction report must be made by the first investment firm to receive the transaction within the UK.
- Having a consolidated tape provider ensures a single source of truth.
Regarding transaction reporting, the FCA’s consultation proposed changes to “reduce the regulatory burden on firms, support sustainable economic growth in the UK, strengthen our ability to fight financial crime and protect market integrity.” Mr Kaye noted that the FIX recommendations focus on simplifying reporting, and include:
- Harmonizing and harmonizing EU post-trade reporting rules and regulations.
- Clarifying one-sided and one-sided reporting on data sharing, responsibility for correcting data, and situations involving multiple agents.
- Ensuring efficient methods of obtaining data and identifiers – that is, using Legal Entity Identifiers for trusts, with the FCA’s Financial Instrument Reference Data System (FIRDS) as the gold standard – and solving data quality problems with CFI codes.
- Removing RTS 22 fields while ensuring that any data used for post-trade transparency is preserved.
- Ensuring the unintended consequences of scope changes, such as removing resources, locations or reporting requirements, do not complicate the reporting process or impair post-trade data quality.
- Recognizing that some business reporting systems may not currently include the proposed data points such as DEA indicators, and that updates will create additional work.
FIX Trading Community is an independent global community where financial markets firms come together to solve common problems and create financial market change. FIX teams in more than 60 countries deal with a wide range of global issues including digital assets; reference points; carbon trading; AI; algo business; FICC and ETFs, while national and regional committees work together to manage local regulations and market structure issues.
Source: FIX
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