FCA Issues 1st Fine for MiFIR Transaction Reporting Failures

To monitor, detect and disrupt market abuse effectively, the FCA needs to receive complete, accurate and timely transaction reports.

Between 1 October 2022 and 31 March 2023, Infinox failed to submit transaction reports for single-stock contracts for difference (CFD) trades executed through one of its corporate brokerage accounts. Trades executed through this corporate brokerage account accounted for the majority of this business line.

Although Infinox identified its failure to submit these transaction reports following a third-party review, it did not proactively report the breach to the FCA. The FCA independently identified this discrepancy in transaction data submitted by Infinox. The breach highlighted weaknesses in Infinox’s transaction reporting systems and controls for a high-risk investment product.

The FCA has fined a number of firms for transaction reporting failures. However, this is the first enforcement action against a firm for a breach of transaction reporting requirements since they became law under the UK Markets in Financial Instruments Regulation (MiFIR).

Steve Smart, joint executive director of enforcement and market oversight, commented: ‘As a data-led regulator it is vital that firms submit accurate and timely transaction reports, and promptly bring any failures to our attention. Infinox failed to do this, which meant market abuse could have flown under the radar and risked the integrity of the market.

‘Our specialist teams constantly monitor market data in real time to track any signs of misconduct.’

Source: FCA