MiFID Back Reporting Remediation: ARM vs Direct Reporting Guide
Key Takeaways
- MiFID back-reporting remediation can be delivered either via an ARM or by reporting directly to the regulator, with each option offering different cost and operational trade-offs.
- ARM providers often charge significant additional fees for back-reporting and resubmissions, which can make remediation more expensive than expected.
- Using a different ARM on a one-off basis can reduce costs by up to 50 percent, while direct reporting can deliver even greater savings for high-volume firms.
- Firms with large transaction volumes are increasingly moving toward direct reporting to gain control, reduce costs, and streamline their reporting processes.
MiFID back-reporting remediation can be delivered via one-off ARM arrangements or direct reporting to the FCA. This guide compares cost drivers, operational considerations, and risk controls to help firms choose the most practical approach.
What You Will Learn
- How MiFID back-reporting projects are typically scoped and costed
- When a one-off ARM arrangement can be cost-effective
- When direct reporting to the FCA may be a better fit
- How to reduce remediation risk with validation and reconciliation
At some point, firms that submit transaction reports will inevitably find themselves remediating their historic transactions. Many firms routinely engage in remediation efforts to enhance their reporting framework.
An average-sized investment firm typically back-reports more than 100,000 transactions annually. Larger firms may back-report millions of transactions, depending on the duration and scope of their errors.
Historical data from 2018 to 2020 suggests that over 50 percent of firms inaccurately reported their transactions. This indicates that many firms have either already undertaken or will soon need to engage in back-reporting. With the active 5-year window for correction closing, firms are now prioritizing their remediation projects.
Challenges with ARMs Fees
Following the conclusion of remediation projects, many firms are surprised to discover that their Approved Reporting Mechanisms (ARMs) charge punitive fees for back-reporting or re-submissions. This is partly because ARMs have discretion in assigning back-reporting charges, which fall outside the typical fees for daily reporting and beyond the scope of regulators to regulate pricing.
Cost-Effective Back-Reporting Options
The cost-effective options for back-reporting depend on transaction volume, technology strategy, and timing. Here are two viable options:
1. Back-Report via Another ARM Under a "One-Off" Arrangement
There are no regulatory restrictions on using a different ARM for back-reporting. Utilising a different ARM than the one used for daily reporting can lead to savings of up to 50 percent compared to the fees charged by the current provider. The onboarding process for a new ARM is straightforward, and the new ARM will support your existing ARM file format, allowing firms to quickly resume operations. There is no ongoing subscription required. Qomply has arranged a partnership with an ARM exclusively for back-reporting purposes. We encourage firms to get in touch with us as the potential savings can be substantial.
2. Back-Report Directly to the Regulator
Firms with larger transaction volumes may opt to report directly to the Financial Conduct Authority (FCA). Once a firm is onboarded to the FCA Market Data Processor (MDP) Submission portal, they can choose to use this connection for back-reporting. Alternatively, firms may transition to direct reporting over time or when their current ARM subscription expires. This approach offers the most significant cost savings for firms with an annual transaction volume exceeding 500,000 transactions. Some firms have reported savings of over 80 percent, and there's a growing trend among larger firms to migrate to direct reporting. It's worth noting that other National Competent Authorities (NCAs) also offer direct reporting, making it not exclusive to the UK.
For more information on any of these options, please contact Qomply, and we will be happy to guide you through the details.
How Qomply can help
Qomply’s Regulatory Reporting Hub combines regulatory expertise with AI, automation and data analytics to deliver scalable, audit-ready reporting intelligence that reduces errors, lowers remediation costs, and minimises operational and regulatory risk.
Covering regimes including MiFIR, EMIR Refit, SFTR, CFTC, CSA, MAS, ASIC and HKMA, Qomply also offers a fully managed service and operates globally from London.
Frequently asked questions
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It compares one-off ARM arrangements with direct reporting to the FCA. The article frames those as the two main cost-effective routes for historic remediation projects.
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It says many firms have historic inaccuracies and the five-year correction window is closing. The article also notes that average-sized firms may back-report more than 100,000 transactions a year, with larger firms reaching into the millions.
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They are a concern because some ARMs charge punitive fees for back reporting or resubmissions outside normal BAU pricing. The article says those pricing decisions sit outside typical daily reporting fees and can surprise firms after remediation begins.
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It says direct reporting becomes especially attractive for firms with annual transaction volumes above 500,000. The article also says some firms have reported savings of more than 80 percent through that route.
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They should consider transaction volume, technology strategy, timing, and the need for validation and reconciliation controls. The article says the cheapest option is not just about submission price but about operational practicality and remediation risk.
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