Transaction reporting has become paramount since authorities have begun to conduct reviews aimed at the accuracy of a firm’s transaction data, controls, and system. Several rules must the adhered to when reporting financial transactions. Therefore, it means that a firm needs to monitor the economic landscape for upcoming changes and developments closely. Failure to adhere to the rules will lead to hefty penalties and a compromised reputation.
MiFIR transaction Reporting helps NCAs to identify and investigate possible cases of market abuse. It also enables NCAs to monitor the fair and systematic running of the markets. MiFIR was articulated after the MiFID analysis to meet the requests of regulators better. Transaction reporting has several benefits to a firm.
To avoid fines
The FCA takes reporting failures seriously since there is extensive guidance on how to submit the reports. A case study on a bank Scotland shows that the bank was fined 5.6 million Euros for not reporting correctly, with about 804,000 being left out of the report. After agreeing to settle in the early stages of the investigation, RBS’s fine was cut by 30%. Therefore, if the firm does not adhere to the requirements, they are likely to face fines and penalties. This is a loss to the business, something that can be avoided.
Consolidation of reports
Transaction reporting helps the firm to consolidate all the reports into a manageable system. Many firms have a processing system that keeps a stable database that reduces the risk of losing information. Having such comprehensive systems in place promotes efficient workflow. The firm can identify where the errors occur so that they can be managed more effectively. These consolidated reports help in the future for any reference and can easily be retrieved when need be, even if it’s after many years.
Improved services
Since you have all the data in one secure system, understanding it will provide valuable insight into what is happening in the business. There will be no back and forth in search of information since all the reports are synchronized. As a result, the streamlined service will save you money and time with a more efficient team. Also, human errors and overpayments will be a problem in the past.
In summary, transaction reports are a regulatory requirement, and their rules are laid out. These rules will always specify the required information to be included in the report. It is for the benefit of the firm to adhere to these rules to avoid fines and maintain a good reputation.
