When the FCA published Consultation Paper 25/32 in November 2025, it signalled the most significant rethink of UK transaction reporting since MiFID II. The direction of travel has been broadly welcomed across the market, but what makes CP25/32 particularly noteworthy is that industry consensus alone will not deliver meaningful change. Whether these reforms reduce cost and risk for buy‑side firms will depend entirely on how they are implemented.
At its core, MiFIR transaction reporting exists for a single, critical purpose: to enable the FCA to detect, investigate, and deter market abuse. The regime is a cornerstone of the regulator’s market surveillance framework, allowing it to reconstruct trading activity, identify suspicious patterns, and link behaviour across firms, instruments, and venues. CP25/32 is therefore not about weakening oversight, but about improving the quality and usability of the data the FCA relies on to fulfil that mandate.
CP25/32 followed the FCA’s earlier Discussion Paper and reflects HM Treasury’s commitment to replace the onshored MiFIR transaction reporting rules with a more proportionate, streamlined, and UK‑focused framework. The consultation closed in February 2026, with the FCA indicating a policy statement will follow later in 2026, alongside an expected implementation period of approximately 18 months.
The FCA’s objectives with these reforms are clear: reduce unnecessary regulatory burden, improve the quality and usability of transaction reporting data, support UK market integrity and economic growth, and lay the foundations for longer‑term harmonisation across adjacent reporting regimes.
Noteworthy proposals include:
- Reducing the number of transaction reporting fields from 65 to 52
- Limiting reporting scope to instruments traded on UK venues
- Removing FX derivatives from UK MiFIR reporting
- Shortening the default back‑reporting period from five years to three
- Formalising FCA FIRDS as the golden source for determining reportability
As previously explored in The FCA Signals a Major Shake‑Up in Transaction Reporting, these proposals represent a decisive shift toward proportionality. More recently, many of these themes were echoed and debated during our MiFIR Transaction Reporting: The State of Play webcast, which highlighted how firms have struggled in the past and how that may shape the future.
Alignment and Divergence
Industry engagement with CP25/32 has been extensive, with a number of industry body responses made public. Taken together, they show strong alignment on the headline direction of the reforms, but a more nuanced debate on how much reform is enough to make a meaningful difference.
There is broad and consistent support for the core proposals. Narrowing reporting scope to UK‑relevant instruments, removing Foreign Exchange (FX) derivatives from MiFIR reporting, reducing the number of reportable fields, and treating the FCA Financial Instruments Reference Data System (FIRDS) as a definitive source are all seen as sensible and overdue. These measures address long‑standing frustrations where reporting obligations deliver limited incremental supervisory value, particularly for buy‑side firms with comparatively modest trading volumes.
However, industry feedback also surfaces a harder truth. Incremental simplification alone may not deliver the outcomes firms or regulators are seeking.
For buy‑side firms in particular, 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. They are needed for a handful reports or for hundreds of thousands of submissions.
There is a primary concern that reducing data volume does not automatically reduce the complexity of the operating model behind it, and questions remain whether the regime is currently disproportionate and a barrier to entry for some buy-side firms, with a better option for the buy-side being a full-scale exclusion.
And this is where industry views begin to diverge.
Simplification Does Not Go Far Enough
Some respondents to CP have argued that incremental changes, such as those highlighted in the CP, risk preserving a fundamentally complex reporting framework. Field and instrument eligibility reductions lower data volume, but not the need to maintain sophisticated reporting logic, exception management processes, governance, and monitoring arrangements.
From this perspective, proposals such as conditional single‑sided reporting are seen as insufficient in their current proposed form as they do not materially change where accountability sits or how reporting is operationalised in practice.
Other views focus on the need for certainty and a clean cut‑over, particularly around back‑reporting. While there is broad support for reducing the default back‑reporting period from five years to three, alternative proposals have been put forward to the FCA. These include shorter back-reporting periods, clearer limits on when extended back‑reporting should apply, and explicit confirmation that firms will not be expected to back‑report fields or instruments that are removed under the new regime. The concern here is not just cost, but also the risk of retaining old reporting logic and recurring remediation cycles that increase complexity and undermine confidence in the reporting framework.
For buy‑side firms, these distinctions matter. Incremental change may reduce marginal effort, but wholesale reform is what would address operational risk and cost. The most beneficial outcome would likely combine immediate, practical relief with clearer boundaries and stronger incentives for genuine simplification (or complete exclusion) over time, while preserving the FCA’s ability to detect market abuse effectively.
That said, it is also widely recognised that the FCA must balance burden reduction against its statutory objectives. While industry engagement has been robust and constructive, the final shape of the regime, and how far it moves from incremental adjustment toward structural change, ultimately sits with the FCA.
Make Reporting Fit for Change
Regardless of where the FCA ultimately lands, buy‑side firms should not assume that regulatory reform alone will resolve underlying reporting challenges. The proposals in CP25/32 may reduce certain requirements, but they will not remove the need for robust operating models, clear governance, and resilient controls. Firms that use this period to strengthen their foundations will be better positioned than those that wait for final rules to do the heavy lifting.
There are practical steps firms can take now to move from reactive compliance to controlled execution:
- Re‑examine the transaction reporting operating model to understand where fixed costs, manual effort, and operational risk genuinely sit, rather than assuming reductions in scope equate to reduced complexity.
- Assessing the resilience of existing frameworks to determine whether they can absorb regulatory or business change without triggering repeated remediation or bespoke re‑engineering.
- Establishing clear ownership and accountability across compliance, operations, and technology to ensure reporting decisions are made deliberately and escalated efficiently.
- Evaluating control effectiveness to confirm issues are identified early through monitoring and assurance, rather than discovered during remediation or supervisory engagement.
- Embed transaction reporting into product, strategy, and change governance, ensuring reporting implications are considered upfront rather than treated as an afterthought once decisions have been made.
Firms that take time now to assess, re-design, and govern their reporting frameworks will be better prepared for both regulatory change and scale
Next Steps
Looking ahead, the direction of travel is clear, even if the destination is not. The FCA has signalled its intent to proceed with reform, and final rules are expected in due course. How far those rules reflect the breadth of industry feedback — and whether they deliver incremental relief or more substantive structural change — remains to be seen.
What is certain is that transaction reporting will continue to sit at the heart of the FCA’s market abuse surveillance framework, and expectations around data quality and control will not diminish. For buy‑side firms, the period between consultation and implementation is therefore not a pause, but an opportunity to assess readiness and strengthen governance. It allows the firms to build reporting frameworks resilient enough to support both regulatory scrutiny and future growth, regardless of where the final policy lands.
Strengthen Transaction Reporting with a Structured Review
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, helping uncover hidden errors, identify root causes, and assess whether 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.
Take a proactive approach to identify reporting risks before they escalate.