FCA Market Watch 81/82: Overview of FCA Final Notices & Enforcement Actions

Over the past nine months, the Financial Conduct Authority (FCA) has strengthened its message to the industry on its expectations for firms on MiFID Transaction Reporting.  It has issued Market Watch 81 and Market Watch 82, and two enforcement actions for firms for ‘transaction reporting failures’.  These actions provide a clear message: firms must adopt proactive governance, robust remediation, and strong oversight of transaction reporting frameworks.

Market Watch 81: Transaction Reporting Vulnerabilities

Published in November 2024, Market Watch 81 provided a detailed FCA-led assessment of UK MiFIR transaction reporting. Although firms have made progress since 2018, the regulator said that systematic weaknesses remain, including:

• Change management failures: poor testing, mapping, and documentation resulting in recurring reporting errors
• Sub-optimal reporting logic: gaps in compliance and business involvement leading to flawed rules
• Inadequate data governance: absence of clear ownership and data lineage undermining accuracy of transaction reports
• Weak control frameworks: insufficient reconciliations and validation checks are leaving errors undetected
• Governance deficiencies: under-resourced compliance teams and limited senior oversight are compounding weaknesses.

Market Watch 82: Elevated Expectations on Remediation

Released in July 2025, Market Watch 82 reinforced the FCA’s focus on how firms identify, resolve, and report transaction reporting issues. The FCA reiterated that it expects firms to:

• Prioritise under-reporting: this means fixing missing transactions before addressing less material errors
• Remediate root causes: resolving systemic issues prior to back-reporting
• Ring‑fence resources: treating remediation as a dedicated programme, not an afterthought
• Embed controls in change processes: ensuring transaction reporting governance is part of every change initiative
• Proactively engage with the FCA: firms are expected to disclose delays or significant remediation constraints early
• Sustain continuous monitoring: embedding testing and control frameworks to prevent recurrence.

Recent enforcement actions

The two penalties this year demonstrate escalating consequences for reporting failures – from a £99,200 fine for a breach of MiFIR Article 26(1) involving missed CFD transaction reports, to a penalty of more than £1m for a breach of MiFIR Article 26 and Principle 3 of the Authority’s Principles for Businesses where systemic control failures affected nearly a million transaction reports. These cases underscore the importance of proactive monitoring systems and prompt self-disclosure when issues are identified.

Key take aways for firms resulting from the final notices

• Prioritise accurate reporting governance: transaction reporting must be elevated as a key regulatory and compliance risk
• Emphasise remediation and root cause analysis: firms must fix issues promptly and thoroughly, ahead of any back-reporting
• Maintain oversight over vendors: delegation of reporting functions does not transfer regulatory accountability
• Act swiftly and transparently: early detection and quick self-reporting can significantly reduce FCA enforcement impact
• Observe enforcement precedents: the larger penalty involved a firm with prior enforcement history for similar failings in 2022.

Conclusion

Market Watch 81 and 82, in concert with these enforcement actions demonstrate a significant shift in tone from the FCA.  It has taken steps to alleviate the reporting burden on firms by reducing the supervisory priority on a number of fields and we expect more clarity to come in terms of future plans in September – but in the meantime the FCA clearly expects firms to be getting their reporting correct.

Without strong internal control, governance, and remediation practices, firms risk becoming the next FCA enforcement example.

We help hundreds of firms including some of the world’s largest banks and asset management firms to ensure transaction reporting accuracy and completeness.  Contact us for a conversation or a demo of our regulatory assurance tools to find out how we can keep you on the right side of the regulator.