FCA Proposes MiFID Reporting Overhaul to Save Firms £100 Million Annually

What Is Changing in the UK’s MiFID Reporting Framework?

The UK’s Financial Conduct Authority (FCA) has unveiled a sweeping set of proposals to overhaul MiFID-era transaction reporting, in a move the regulator says will save firms more than £100 million a year. The consultation — released as CP25/32 — represents the most significant redesign of Britain’s transaction reporting landscape since the post-Brexit onshoring of EU rules in 2021.

The FCA currently receives over 7 billion transaction reports each year, covering equities, fixed income, derivatives and more. These data form a key part of the regulator’s surveillance toolkit, supporting investigations into insider dealing, market manipulation and systemic risks.

Under the new proposals, the regulator intends to remove foreign-platform derivatives entirely from the reporting perimeter. The FCA argues that are already covered by multiple reporting regimes, including EMIR and the Bank of England’s own data collections, and that MiFID reporting adds limited supervisory value. More than 400 firms would benefit from this exemption.

The FCA also plans to eliminate reporting obligations for around six million instruments traded exclusively on EU venues. Since Brexit, these instruments offer little relevance to UK market-abuse oversight, yet remain part of the MiFID rulebook due to the legacy “traded on a trading venue” definition.

In addition, firms would view their obligation to correct historical errors reduced from five years to three — a change expected to cut back-reporting volumes by about one third.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said the goal is to make reporting smarter, not fragileer. “Reducing costs while improving the quality of the data we receive is a no-brainer,” she said.

Investor Takeaway

Why the FCA Is Targeting MiFID II’s Most Painful Features

The proposals reflect a broader UK strategy to re-engineer capital-markets rules post-Brexit. When the UK left the EU, it lifted the MiFID II and MiFIR frameworks directly into domestic law, preserving continuity but also locking the country into one of the most complex reporting regimes ever implemented.

MiFID II’s expansion in 2018 — increasing the number of mandatory fields from about 25 to more than 65 — created significant operational overhead. Firms were required to provide granular trader identifiers, decision-maker data, execution timestamps, reference data and cross-venue transparency details. While the goal was improved market oversight, the reporting burden often overshadowed the benefits.

Industry groups have long argued that parts of the MiFID II architecture added little insight for regulators but imposed substantial costs on firms with . Banks, interdealer brokers, asset managers and retail platforms all flagged FX derivatives reporting as one of the most disproportionate requirements relative to its supervisory value.

The FCA’s proposed changes directly address these long-running concerns. By removing redundant asset classes and irrelevant instruments, the regulator is viewking to rebalance the cost-benefit equation while maintaining high-quality data for market-abuse detection.

How Much Will the Industry Save?

The FCA estimates the current cost of transaction reporting at £493 million per year. If the changes move forward as proposed, this figure would fall to roughly £385 million — a net savings of £108 million annually.

Several features contribute to this reduction:

• Eliminating FX derivatives reporting: Removes a major cost driver for more than 400 firms.
• Removing EU-exclusive instruments: Cuts millions of unnecessary reports each year.
• Shorter error-correction window: Reduces data maintenance obligations and lowers operational strain.

A shorter three-year correction period is particularly impactful. Under the current five-year rule, firms must maintain historic logic, reference data and system configurations for half a decade — a costly and resource-intensive requirement.

Investor Takeaway

What This Means for the UK’s Post-Brexit Market Strategy

The reforms sit alongside the UK government’s broader push to modernize financial-services regulation. Since announcing the Edinburgh Reforms in 2022, the Treasury has encouraged the FCA and Bank of England to simplify EU-derived rules and strengthen the UK’s competitiveness as a listing and trading hub.

By removing duplicative requirements across MiFIR, EMIR and SFTR, the FCA aims to create a more coherent reporting environment. The regulator said it will work closely with the Bank of England and HM Treasury to align reporting regimes and eliminate overlaps that add costs but offer little supervisory benefit.

While the UK is diverging from EU MiFID II, both sides remain aligned on the need for robust oversight and . The FCA insists that, despite the reductions, Britain will retain a strong surveillance framework that continues to detect misconduct and systemic risks effectively.

The consultation closes in ahead 2026, with final rules expected later that year.