The FCA has made public its position on the Short Selling Indicator (SSI) for UK MiFIR transaction reporting.
Although we have been liaising with clients on this point for some time, it’s now been confirmed that where firms are aware of misreporting in relation to the SSI, they are not required to both cancel and replace those reports or notify the FCA of the misreporting via an errors and omissions notification form. The FCA will keep this temporary measure under review.
However, given this measure only addresses back-reporting, we would surmise that the FCA still expects firms to address erroneous reporting in their daily reporting flow until further notice. Therefore Kaizen will continue to identify issues with the SSI that arise in our testing.
This is an interesting development and a good example of a flexible and pragmatic approach by the FCA that will certainly be welcomed by the industry. Is this the shape of things to come from the FCA?
Reporting obligations to EU regulators continue to apply and are unaffected by this announcement however ESMA announced it will be dropping the short-selling flag following its MiFID II Review in April last year.