Partner Article

The importance of transaction reporting

In the wake of last year’s string of new financial regulations throughout Europe and the US, financial institutions are now faced with more rules and restrictions than ever before. The importance of transaction reporting is now paramount as authorities are beginning to conduct reviews which are specifically aimed at systems, controls and the accuracy of a business’ transaction data as outlined below.

What is transaction reporting?

European regulation ensures that firms report their transactions to a local competent authority via an Approved Reporting Mechanism within a T+1 timeframe. In the UK companies need to report their transactions promptly to an Approved Reporting Mechanism (ARM), such as UnaVista. These ARMs use enhanced validation through an intuitive interface to allow additional data reporting and analysis for a more comprehensive service.

Compliance

A number of regulations must be adhered to when reporting financial transactions. These include the, MiFID, European Market Infrastructure Regulation (EMIR) and the Regulation on Energy Market Integrity and Transparency (REMIT). This myriad of guidelines means that firms now need to constantly monitor the financial landscape for upcoming changes and developments. Failure to do so can lead to heavy fines and a compromised reputation within times of austerity.

Recent case study

The FCA takes any reporting failures extremely seriously as there is extensive guidance on how to submit these reports correctly. A firm which recently felt the full brunt of the FCA is Royal Bank of Scotland who were fined £5.6 million in August 2013. RBS came under fire after they failed to properly report nearly 45 million transactions between November 2007 and February 2013. In addition, 804,000 transactions were left out of reports altogether between November 2007 and February 2012. After agreeing to settle in the early stages of the investigation, RBS’s fine was cut by 30%. This latest case study adds to the FCA’s now eight-strong list of fined firms, including Barclays (£2.4m), Plus500UK Limited (£250,000) and Credit Suisse (£4.2m).

Benefits

Transaction reporting provides a number of benefits for a business alongside the obvious necessities. ARMs, like the aforementioned UnaVista solution, can not only help a firm to meet FCA requirements but also consolidates all your reports into one manageable system. Having a comprehensive system in place will promote efficient workflow and allow you to identify where errors are occurring so that they can be managed more effectively. Understanding this data also provides valuable insight into what is happening in the business at all times. Last but not least, a streamlined service will allow you to save money with a more efficient and productive team, avoiding human errors and overpayments.

This was posted in Bdaily's Members' News section by April Orchid .