Recent multi-million pound fines levied against Goldman Sachs and UBS AG mark a "statement of intent" from the Financial Conduct Authority (FCA) as the regulator cracks down on MiFID-related reporting failures, according to regulatory experts.
Goldman and UBS were handed fines of £34.3m and £27.6m each respectively in March for historic failures related to the initial MiFID regulation, rather than MiFID II which came into force in January 2018.
The fines could mark an intensified focus on transaction reporting with regard to the new standards.
Goldman's fine was the 13th the FCA has levied against firms for breaching MiFID reporting standards.
The regulator has also dished out penalties to Merrill Lynch International, Deutsche Bank AG, RBS, James Sharp & Co, Plus500UK, City Index, Société Générale, Commerzbank AG, Instinet Europe, Getco Europe, Credit Suisse, Barclays Capital Securities and Barclays Bank.
Director of regulatory change and compliance risk at BNY Mellon's Pershing Linda Gibson said the most recent fines mark a "statement of intent" from the FCA and "we can only expect to see more of such enforcement actions".
She explained: "With the significant uptick in the complexity of reporting - due to the increased number of data fields and additional instruments brought into scope, along with the wealth of new firms that were brought into scope for reporting for the first time following the removal of the portfolio managers exemption - we can only expect to see more of such enforcement actions."
Gibson added the FCA is also likely to "turn its attention to compliance with the significantly enhanced requirements under MiFID II".
Elsewhere, Gibson said "Brexit will not be a mitigating factor for European firms with UK clients who fail to report transactions in the right way", and while the FCA has said it will act proportionately, "the expectation on firms is to know any gaps in records, and correct any missing or incomplete transactions as soon as possible".
Jamie Symington, partner in Brown Rudnick's global white collar crime and regulatory investigations group, and former director of investigations at the FCA, said "two hefty fines in as many weeks" demonstrates "the FCA feels strongly there is still a need to improve standards throughout the industry".
He added: "The FCA stresses in this latest case that it feels it has given the industry considerable support with getting transaction reporting right, and has explained its importance to market and firm surveillance."