Recent proposed regulatory changes have exposed a potential long‑standing challenge for financial services firms. Transaction reporting is mandatory, technically complex, and increasingly scrutinised, yet it rarely scales in line with business growth. The FCA’s Consultation Paper, CP25/32, brings into focus whether transaction reporting frameworks should evolve alongside business growth.
Why CP25/32 Puts Scalability Under the Spotlight
Published in November 2025, CP25/32 represents the most significant rethink of the UK transaction reporting regime since MiFID II was introduced. Its stated aim is to simplify reporting requirements, reduce unnecessary burden, and improve the quality of data the FCA relies on to detect and investigate market abuse, while supporting the UK’s broader competitiveness and growth agenda.
Headline proposals include narrowing reporting scope to UK‑relevant instruments, removing FX derivatives from MiFIR reporting, reducing the number of reportable fields, and shortening the default back‑reporting window, all of which have been widely welcomed across the market. These changes are intended to strip out low‑value data and duplication, allowing both firms and the regulator to focus on information that genuinely supports market abuse detection and supervisory insight.
However, for financial services firms, CP25/32 matters not just because it changes what must be reported, but because it potentially exposes a deeper operational challenge. While the proposals reduce scope and reporting volume, they do not remove the need for robust systems, controls, and governance. The FCA has been clear that transaction reporting remains a primary surveillance tool, and expectations around accuracy, consistency, and explainability are rising, not falling.
This matters because the costs and risks that constrain growth are rarely driven by reporting volume alone.
Fixed Cost Reality
For many firms, the greatest transaction reporting costs are driven not by volume, but by fixed infrastructure. Systems, reconciliations, controls, and governance processes must exist regardless of how many fields are removed or instruments fall out of scope.
As a result, firms with inflexible or overly bespoke reporting frameworks may see only marginal relief unless they take the opportunity to assess and adjust the underlying operating model.
The Compounding Effect of Reporting Complexity
This is where scalability becomes critical. As trading strategies expand, products evolve, people move, and volumes increase, transaction reporting frameworks are often the first to show strain. Controls designed for smaller or simpler operating models begin to break down.
Manual workarounds proliferate, exception volumes rise, and the risk of incorrect or incomplete reporting increases. Small data quality issues are no longer isolated; they compound across systems, asset classes, and time.
Crucially, these issues are rarely detected at the point of change. Errors are often identified through supervisory engagement, internal assurance reviews, or remediation exercises, by which point their impact has multiplied.
In many cases, this late discovery is driven not by the absence of controls, but by insufficient documentation of reporting logic, scenario mapping, and assumptions, making it difficult to evidence how reporting was intended to operate as trading activity changed.
What begins as a reporting logic gap or data dependency issue can quickly escalate into widespread inaccuracies, extended remediation timelines, and increasingly complex back‑reporting exercises. As data ages, systems change, and staff move on, reconstructing historic reports becomes harder, slower, and more disruptive to business‑as‑usual activity.
The operational impact is frequently disproportionate. Even where trading activity grows incrementally, the effort required to maintain reporting accuracy can increase exponentially.
Compliance teams face recurring remediation cycles. Technology teams are asked to apply tactical fixes to legacy solutions that were never designed to scale. Operations teams become more cautious about change, anticipating that transaction reporting will be affected, even where the commercial change appears modest.
The Two Ways Firms Get Reporting Wrong
Over time, firms tend to fall into one of two problematic patterns.
1. Reporting Becomes a Constraint on Growth
In some cases, transaction reporting becomes something the business works around rather than relies on. New products are delayed while reporting logic is re‑engineered, controls are retrofitted, and data flows are reassessed. Market entry and strategy changes are slowed not by commercial considerations, but by concerns about whether reporting frameworks can support the change.
2. Reporting Becomes an Afterthought
In other cases, the opposite occurs. New products or strategies are launched on time, with transaction reporting treated as a follow‑up activity. Reporting is addressed after the fact, once trading is live. This often creates a separate stream of issues: incomplete or incorrect initial reporting, rushed remediation, complex back‑reporting, and heightened regulatory risk. What was intended to preserve commercial momentum instead creates longer‑term operational drag and supervisory exposure.
Scalability As a Strategic Decision
Regulatory reform has highlighted this challenge more clearly. While simplification and scope reduction under CP25/32 are welcome, they do not, on their own, resolve the underlying issue. If reporting frameworks remain inflexible or fragmented, firms will continue to absorb risk and cost every time the business changes.
CP25/32 is not just about simplifying rules. It is a test of whether transaction reporting is designed to scale with the business or remains a fragile compliance function. Firms that use this moment to reset governance, controls, oversight, and delivery, treating reporting as a core operational capability rather than an afterthought, will be better equipped to support growth without repeating cycles of remediation as regulatory expectations continue to rise.
How to Embed Reporting as a Core Operational Capability
To support sustainable growth, transaction reporting needs to be designed as a core capability rather than a regulatory afterthought.
Practical steps firms can take now include:
- Reassess where transaction reporting creates friction in business change: This includes product launches, staff changes, and the use of new markets and instruments. It is also important to check whether reporting considerations are delaying decisions or being deferred until after go‑live, increasing downstream remediation risk.
- Identify reliance on manual intervention, workarounds, or bespoke reporting logic: Focus on areas where the risk of incorrect or inconsistent reporting increases as activity scales and back‑reporting becomes more complex over time.
- Clarify ownership and accountability across compliance, operations, and technology: Ensure reporting decisions are made deliberately, and issues are addressed early rather than escalated once problems have compounded.
- Evaluate whether controls detect issues at source: Focus on the point of change or execution, rather than after errors have multiplied and supervisory engagement has begun.
- Embed transaction reporting considerations into governance and change management processes: Ensure reporting is designed alongside new products and strategies, not retrofitted once trading is live.
- Document reporting logic, key assumptions, and trade scenarios end‑to‑end: Map how different trading behaviours translate into transaction reports, so outcomes are explainable, repeatable, and defensible under supervisory scrutiny.
Taken together, these steps help reposition transaction reporting as a stable, governed capability that can absorb change predictably, rather than a fragile process that constrains growth or generates repeated remediation as the business evolves.
Why Resilient Reporting Supports Growth
When transaction reporting is built on strong foundations, its role changes. Rather than absorbing repeated operational shocks as the business evolves, it becomes a source of predictability and control.
Clear data models, consistent controls, and well‑defined governance reduce the likelihood of recurring remediation, late‑stage issue discovery, and complex back‑reporting. This resilience is reinforced when reporting logic, key assumptions, and trading scenarios are clearly documented, providing a defensible link between trading activity and reporting outcomes as the business evolves.
Issues are identified earlier, dependencies are understood, and reporting outcomes are easier to explain and defend when regulatory scrutiny increases.
This directly supports scalability. Firms with resilient reporting frameworks can introduce new products, onboard counterparties, or increase trading volumes without triggering disproportionate increases in operational risk or cost. Reporting ceases to be a bottleneck at the end of the change process and instead becomes part of how change is delivered safely.
For senior leaders, this translates into confidence. Growth decisions can be made knowing that reporting will scale alongside the business, not lag behind it, require retrospective fixes, or introduce hidden regulatory exposure months later.
Strong Reporting Foundations Enable Sustainable Change
Sustainable growth in a regulated environment depends on more than commercial opportunity. It requires operational capabilities that scale predictably, withstand scrutiny, and continue to function as regulatory expectations evolve.
Transaction reporting plays a critical role in that equation. Firms that invest in robust reporting governance, data quality, and control frameworks are better placed to adapt to regulatory change, respond to supervisory expectations, and grow without accumulating unmanaged risk or repeating cycles of remediation.
In an environment where transaction reporting underpins market abuse surveillance, resilience is not just an operational benefit. It is a prerequisite for credible, sustainable growth.
Identify and Reduce Transaction Reporting Risk
ACA supports firms across the transaction reporting lifecycle, from independent accuracy and completeness testing to control framework design, governance enhancement, and operating model optimisation. Support ranges from targeted diagnostic reviews through to ongoing monitoring and managed services, helping firms reduce risk and meet regulatory expectations with confidence.
Firms can gain a clear, independent view of their reporting risks through a free transaction reporting review. Delivered using ACA’s Automated Regulatory Reporting Maturity Assessment (ARRMA), the review provides data-led analysis of reporting accuracy, completeness, and control effectiveness. It helps uncover hidden errors, identify root causes, and assess whether reporting frameworks can scale with regulatory change.
Combining specialist advisory with independent monitoring, it provides a practical view of where complexity, cost and risk sit, and where targeted improvements will have the greatest impact.
Get a clear, independent view of your transaction reporting risks today.