In terms of data management, new obligations covering transaction reporting (providing detailed post-trade data to regulators for market surveillance) and transparency (publishing both pre- and post-trade data to the market) could both prove burdensome. Transaction reporting requirements, in particular, are set to become much more challenging as the scope and complexity of the regulations are increasing significantly.
Ultimately, firms will be required to report more granular details (more than threefold increase in the number of fields for each transaction report) covering a greater number of transactions (more instruments are now in scope). The ability for the buy-side to delegate reporting responsibility is also less clear cut, meaning in some cases more parties will have to report.
Compounding the impact of this greater complexity, is the growing cost of non-compliance.
Although current transaction reporting requirements are significantly simpler than the new standards due to come into effect next year, many firms have incurred significant fines for getting it wrong. And those penalties appear to be growing (see chart below).