The regulatory reporting environment has changed significantly over the past few years。Geopolitical events such as Brexit and regulatory changes such as MiFID II have forced financial services firms to overhaul their reporting obligations.。

The upcoming Cryptoasset Market Regulation (MiCA) later this year will have a huge impact on cryptocurrency reports。In terms of reporting, each regulator has its own requirements。While there is talk of a uniform reporting system among top regulators, the reality is different。

Quinn Perrott, Co-CEO of TRAction Fintech, said: "Harmonized reporting by major regulators around the world means that data can be easily shared between regulators for better monitoring and regulatory results, and harmonization means significantly lower implementation costs for businesses that need to comply.。"

"Of course, in reality, each regulatory agency is holding its own words, so the requirements are not completely unified without obvious necessary reasons, although they are all starting to point in the same direction and there are many similarities。"

In terms of regulatory reporting, financial services companies must follow appropriate requirements。There are a lot of considerations: time, appropriate forms and portals, and of course accurate data.。

Brexit but report remains coordinated

The EU and the UK are already a unified jurisdiction。However, this is due to the existing pan-EU regulatory structure and the fact that the UK remains within the EU until 2020.。

Regulatory reporting requirements for UK brokers can be broadly divided into trade and trade reporting and company data reporting.。

In terms of transactions and transaction reporting, the UK's Financial Conduct Authority (FCA) still uses the requirements introduced by the Markets in Financial Instruments Regulation (MIFIR) to detect and investigate suspected market abuse.。The provisions of the European Market Infrastructure Regulation (EMIR) improve the transparency of derivatives markets and reduce financial stability risks。

Ron Finberg, executive director of global market intelligence at Cappitech Standard & Poor's, elaborated on the complexity of the report: "The T + 1 transaction report for the transaction is divided into EU regulations and UK regulations of the European Securities and Markets Authority (ESMA).。The main regulations are EMIR and MIFIR, where the EU and UK versions are very similar but need to be reported to different locations.。EMIR covers all derivatives, while MIFIR targets products traded on the trading floor (TOTV) or related traded on the trading floor (UTOTV).。

"Forex CFDs are only reported under EMIR and Vodaphone's shares are only reported under MIFIR, but Vodaphone's CFDs fall within the scope of both EMIR and MIFIR daily trading reports.。Another regulation, called the SFTR, deals with the daily reporting of financial transactions in securities, but only a very small number of CFD brokers fall within the scope of the regulation.。

The impact of Brexit

The UK will leave the EU in December 2020.。With the end of the transition period, the regulatory obligations of UK companies have also changed: MIFIR and EMIR have been replaced by UK MIFIR and UK EMIR, respectively。However, for UK companies that are allowed to trade or transact on UK, Gibraltar or EU trading venues, MIFIR's core reporting details remain largely unchanged。

Gurry said: "In the case of EU investment firms executing transactions through UK branches or vice versa, amendments to the dual reporting obligation are noteworthy.。The FCA makes clear that branches can no longer meet their reporting obligations simply by transmitting orders to other entities.。Therefore, investment firms need to contract with both UK ARM and EU ARM to facilitate dual reporting。"

According to the UK EMIR, the FCA has assumed responsibility for registering and supervising the repository of transactions operating in the UK after Brexit.。It is worth noting that the branches of third-country companies in the UK are not within the scope of the UK EMIR reporting system, thereby reducing the reporting burden of these entities。However, UK branches established overseas must comply with the reporting requirements of the UK EMIR system.。

"While the FSA requires companies to provide regular data to inform their regulatory strategies during Brexit and the transition period, it is worth noting that Brexit has not had a lasting impact on corporate data reporting requirements.。"

Finberg found "disagreement between the EU and UK versions of the regulation, particularly regarding the effective date and exemptions."。He added: "EMIR REFIT is a wide-ranging update to EMIR regulation that will come into force under ESMA in April this year, while the UK will not come into force until September.。Similarly, in the case of the SFTR, the validation measures added by the European Securities and Monetary Authority last September will also come into force in the UK later this year.。

Report to CySEC

EU member state Cyprus is home to many retail brokers。Most brokers also offer their services in other EU countries through Cyprus Investment Company (CIF) license passport。These Cyprus regulated brokers are only required to report in their home jurisdiction unless they have an entity in another EEA jurisdiction through a branch or binding agent。

The Cyprus Securities and Exchange Commission (CySEC) has three different methods of regulatory reporting: the CySEC Transaction Reporting System (TRS), the CySEC Portal and the CySEC XBRL Portal。

TRS is the central platform for the submission of standardized reports, including quarterly statistical tables (QST), complaint forms and monthly prevention statements (MPS).。These reports must be in a format predefined by CySEC, which is critical to the validation process。

The CySEC portal is used for reports in non-standardized formats such as annual compliance reports, internal audit reports and financial statements。Unlike TRS, the structure and content of these reports may vary according to the specific requirements of the reporting entity。

In terms of reporting, the CySEC XBRL portal is the latest addition to address reporting obligations related to the prudential regulatory framework for investment firms.。Companies must submit reports through the XBRL portal, which uses the Extensible Business Reporting Language (XBRL) for standardized and machine-readable reporting。

Evdokia Pitsillidou, Director of Risk and Compliance, SALVUS Funds, said: "CySEC adopts a multi-faceted approach to regulatory reporting, taking into account both standardized and non-standardized formats.。"The emphasis on validation and status confirmation ensures that reports submitted meet regulatory requirements and helps improve the overall integrity and effectiveness of regulatory reporting systems."。"

SALVUS Funds also publishes annual regulatory reporting obligation reporting calendar to CySEC。

Although companies regulated in Cyprus are only required to report to the island's regulators, the data required by these reporting obligations broadly cover investment services and products provided by companies in the European Economic Area (EEA) and third countries.。

Pitsillidou noted that CySEC has the authority to forward the information it collects to regulators such as the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) and share it with authorities in other EEA member states.。

The upcoming MiCA

In order to strengthen the supervision and reporting of cryptocurrencies, the European Union is about to launch the Crypto Asset Market Regulation (MiCA), which is expected to be fully implemented in June 2024.。However, the regulation will only cover physical cryptocurrency products under a Crypto Asset Service Provider (CASP) license.。

MAP S.Alexandros Constantinou, Director of Compliance Services at Platis, said: "MiCA has established a dedicated regime for the issuance and public offering of crypto assets and services related to crypto assets.。MiCA does not include financial products with reference to crypto assets, which are financial instruments that are regulated by other regimes such as MiFID II (e.g. Bitcoin CFDs). "。

Currently, brokers offering cryptocurrency CFDs still have to file regular reports。Constantinou noted, however, that "the main difference in the report is its EMIR-Refit report, where specific fields are required to state that the report refers to the crypto asset class and specifically refers to the underlying crypto asset."。

For the report under MiCA, the regulator has not yet proposed specific regulatory requirements, although it will cover a range of reports, including compliance-related reports, reports related to its capital adequacy, and data collection reports tailored to provide various crypto asset services and manage crypto assets.。

Pitsillidou said: "Currently, the reporting of cryptocurrencies has to be done through monthly precautionary statements (MPS) detailing the receipt of specific crypto assets as deposits by regulated entities.。In addition, the quarterly statistical table requires the date on which the investment company offers contracts for difference (CFD) for cryptocurrency-based assets.。"

"In view of the fact that MiCA regulation is not yet fully in force, CASPs currently registered with CySEC must comply with their reporting obligations under the Anti-Money Laundering / Combating the Financing of Terrorism framework."。"

The entry of artificial intelligence

As in other industries, artificial intelligence (AI) is having a major impact on rule-based regulatory reporting tasks.。A number of regulators around the world have published reports on the benefits of AI and highlighted caution.。In terms of regulatory reporting, AI can facilitate more efficient and accurate regulatory compliance by automatically monitoring and analyzing large data sets。It can further strengthen the detection of violations, potential risks and non-compliance, thereby improving overall regulatory oversight。

Pitsillidou added: "We must emphasise that AI must be adequately trained in the regulatory reporting process.。It is important to note that the adoption of AI in the regulatory arena also presents a range of challenges, including issues related to transparency, accountability and the ethical use of AI.。Striking a balance between innovation and ethical deployment of AI technologies is critical to ensuring a fair and effective regulatory environment in an era of advancing technological capabilities.。