Fri, Mar 22, 2019

Small AIFMs - Mind the Transaction Reporting Gap

A year on from the Markets in Financial Instruments Directive II (MiFID/MiFIR) and transaction reporting is still an area of confusion for alternative investment fund managers (AIFMs). This is particularly the case for small authorised AIFMs who are unclear on their obligations to undertake transaction reporting when executing orders for individual separate account clients.

In order to unpick the confusion, firms should understand which directive they are authorized under. Full-scope UK AIFMs are not subject to transaction reporting because they are authorized under the Alternative Investment Fund Managers Directive (AIFMD) and are expressly permitted to undertake portfolio management for separate account clients. Small authorized UK AIFMs permitted to undertake individual investment management are authorized under MiFID, and as a result are required to transaction report when undertaking individual portfolio management.
On another note, the Financial Conduct Authority (FCA) this week fined a global investment bank £27.6 million for transaction reporting failures relating to 135.8 million transaction reports between November 2007 and May 2017, which is a timely reminder of importance the FCA places on transaction reporting as a critical tool for monitoring market activity.

Financial Services Compliance and Regulation

End-to-end governance, advisory and monitorship solutions to detect, mitigate, drive efficiencies and remediate operational, legal, compliance and regulatory risk.

Regulatory Advisory and Assurance Services

Within our Regulatory Advisory and Assurance Services, we assist financial services firms in a range of engagements across our suite of subject matter expertise.