FCA Enforcement In Action: Major Penalty For Systemic Transaction Reporting Failures
Zakir Karim
Key Takeaways
- Systemic failings in core obligations like transaction reporting will be penalised harshly, especially when repeated or prolonged.
- Data quality and analytics are central to UK financial stability planning, with the Bank of England now explicitly targeting risk transmission across banks, funds, and insurers.
- Global partnerships are shaping the UK’s regulatory diplomacy, with IP and innovation at the heart of bilateral agreements like the UK– Singapore MoU.
- Regulatory simplification is not off the table – the FCA’s move to reduce nil return requirements shows that relief for well-behaved firms is still a live priority.
A Month of Enforcement, Simplification & Strategic Alignment
August 2025 saw UK regulators balancing robust enforcement with strategic reform. From an FCA penalty for systemic transaction reporting failures, to the Bank of England’s overhaul of its macroprudential risk framework, the focus was firmly on improving resilience, transparency, and data quality. Meanwhile, international partnerships and a move toward lighter regulatory burdens for smaller firms marked progress in shaping a more proportionate and innovation-ready financial system.
- Sigma Broking fined £1.08m for five years of inaccurate transaction reporting under MiFIR.
- BoE updates financial stability framework, expanding focus to nonbank institutions and advanced risk modelling.
- UK–Singapore sign new IP MoU, boosting cooperation on patents, innovation, and tech.
- FCA exempts 36,000 firms from submitting REP008 nil returns, easing compliance for smaller firms.
FCA Enforcement in Action: Major Penalty for Systemic Transaction Reporting Failures
Sigma Broking Limited failed to comply with its transaction reporting obligations under Article 26 of MiFIR and Principle 3 of the FCA’s Principles for Businesses between December 2018 and December 2023. Nearly 100% of the 924,584 transaction reports submitted during this five-year period were either incomplete or inaccurate. The failures stemmed from incorrect system setup and weak reporting logic that were never corrected. The errors included missing client allocations and reversed buyer/seller information, meaning the FCA was unable to receive reliable data for market surveillance. This systemic failure highlighted poor internal controls and a lack of effective governance over Sigma’s reporting processes.
FCA response: The FCA imposed a financial penalty of £1,087,300 on Sigma (discounted from £1,553,300 for early settlement). The regulator emphasised that accurate and complete transaction reporting is critical for market integrity and the fight against financial crime. The FCA considered Sigma’s failings particularly serious given (1) the scale of inaccuracies across all trading desks, (2) the five-year duration of non-compliance, and (3) the fact that Sigma had previously been fined for related breaches. The FCA also criticised Sigma for not promptly alerting the regulator to the issues and for only beginning remediation after external pressure and third-party review.
Bank of England Releases Financial Stability Paper
On 19 August 2025, the Bank of England published Financial Stability Paper No. 52, setting out an updated analytical framework for how the Financial Policy Committee (FPC) monitors and responds to systemic risks. The framework reflects a growing focus on nonbank financial institutions, such as investment funds and pension schemes, following lessons from the 2020 “dash for cash” and the 2022 LDI crisis. It introduces a structured, three-pillar approach: clarifying financial stability objectives and tools, analysing how shocks transmit through the system, and strengthening dataled monitoring using advanced modelling and scenario analysis. The paper also highlights the FPC’s dual role, prioritising financial stability while supporting broader government economic objectives like growth and employment. Overall, the updated framework signals a more proactive, forward-looking approach to macroprudential regulation in an increasingly complex financial system.
UK–Singapore Renew Intellectual Property MoU
On 6 August 2025, the UK and Singapore renewed their intellectual property cooperation agreement, signing a fresh three-year Memorandum of Understanding (MoU) between the UK Intellectual Property Office (IPO) and Singapore’s IPOS. The renewed pact builds on a decade-long relationship and aims to strengthen collaboration on IP awareness, patent examination, business support, and the protection of innovations in emerging technologies. Coinciding with the 60th anniversary of UK–Singapore diplomatic relations, the agreement reaffirms both nations’ commitment to building a trusted, innovation-friendly ecosystem that supports cross-border IP rights and commercialisation.
FCA Streamlines Data Reporting for Firms
On 28 August 2025, the FCA announced that 36,000 authorised firms are now exempt from submitting certain nil returns (specifically, REP008), significantly cutting down administrative burden and making regulatory reporting more proportionate. This is a welcome move to ease compliance demands for a broad swathe of financial firms.
