FCA to "dramatically increase" scrutiny in 2020 - expert

UK regulator the Financial Conduct Authority is set next year to “dramatically increase” the levels of scrutiny it applies to reporting obligations under Europe’s Mifid and Emir reforms, a reporting expert has claimed.

Reflecting on 2019, Dario Crispini, the chief executive of London-based Kaizen Reporting, said his firm has expanded its reporting services including those for Mifid and Emir (European Market Infrastructure Regulation), and increased its headcount.

And Crispini, who worked at the FCA for almost a decade before founding Kaizen in 2013, said demand for reporting services is only set to increase next year: “Looking ahead to 2020 we expect to see a dramatic increase in the level of scrutiny from the FCA with a particular focus on data quality for both Mifid and Emir.”

Mifid II, which took effect in January 2018, requires trading firms to report their trade and transaction data to regulators in much greater detail than they had been required to do previously.

National authorities like the FCA have so far taken a pragmatic approach by not fining firms that are failing to meet these requirements but this stance is not going to last forever.

The Emir reforms that included the mandatory reporting of derivatives, which took effect in early 2014, are currently under review and a second wave of regulation is expected in early 2021, meaning the preparatory work will have to be done next year.

Kaizen is also working hard with its various banking, brokerage and buy-side clients to ensure they are compliant with the Senior Managers & Certification Regime (SMCR) which replaced the Approved Persons Regime on December 9.

Crispini added: “The quality assurance services we offer play an important role in helping firms and their management, particularly those responsible for reporting under SMCR, deliver high quality reporting and increases their confidence and that of the regulators that they are getting it right.”

Kaizen’s ReportShield was named ‘Best New Product: Regulatory Reporting’ at the FOW International Awards on December 10.