The Difference between Good and Bad Transaction Reporting

Transaction reporting is a requirement, which ensures that reporting firms disclose their transactions to their local regulator within the T+1 time frame. In the UK, this is carried out by Approved Reporting Mechanisms (ARMs), which provide enhanced validation through an intuitive interface, before submitting reports to the Financial Conduct Authority (FCA).  By using an ARM, an organisation gains greater visibility and transparency and ensures clients remain compliant with transaction reporting regulations.

Transaction reporting and trade reporting are often mixed up, the main difference is that trade reporting is done near real-time and is required to help disseminate pricing information across the market. Transaction reporting is T+1, and is used to monitor market abuse.
Which factors make a good transaction reporting system?
The best transaction reporting services are designed to take in data from multiple sources. This creates a versatile platform capable of increasing automation within large institutions as well as very small institutions. This combats a frequent problem that many organisations face, in that they need to adhere to a specific API, with a lot of IT involvement, which can complicate and elongate the process.

Smaller brokers within an emerging market can use a browser-based user interface to upload their reports in spreadsheet format, minimising IT.

A system that has been designed to be very configurable ensures the needs of clients can be met very quickly. Good transaction reporting systems can be easily altered in accordance with differing business practices and new regulations, they will also not restricted to a specific asset classe within any market. This versatility ensures that problems are solved efficiently within a number of business areas whilst still adhering to regulations.

A key aim is to try to resolve all exceptions on T and not leave anything over to T+1, which can lead to issues. This ensures everyone working on a project knows what is happening and have all their positions closed by the end of the day, leaving no open positions overnight. A good transaction reporting system also lends itself well to metrics or benchmarking. Organisations can measure performance in regards to timing, error rates and whether everything is being resolved on T. Certain ARMs are also looking at the big issue of clearing by discussing with large clearing houses about transactions and contracts. Therefore, alongside a range of different contracts, you may be offered a range of different types of protection.
Transaction reporting guidance
There are a number of sites where you can gain more information about transaction reporting online. One of our favourite platforms is UnaVista from London Stock Exchange Group. The website offers educational resources, including a number of articles and videos on the subject of transaction reporting and a presentation of its own transaction reporting service.

UnaVista is already used by thousands of global companies. The flexible platform can be used to solve a number of different business problems including post trade services, data solutions and reconciliations. A short demo video also allows users to choose whether UnaVista is right for their organisation.

 

This article was provided by UnaVista from London Stock Exchange Group, a secure hosted platform for all validation, matching and reconciliation needs. UnaVista gives you clear, up-to-date views of your data and gets you to your exceptions quickly – meaning you can deal with them before they become errors. The site also provides a range of news, articles and information on the latest financial regulation and legislation that affects you, from CRD IV to Form PF.