Silent Errors in MiFID Transaction Reports: Why Reconciliation Matters
Key Takeaways
- MiFID transaction report reconciliation is a regulatory requirement under RTS 22 Article 15, and firms must regularly reconcile against FCA MDP data to ensure completeness and accuracy.
- “Silent errors” occur when reports pass validation but still contain incorrect or missing data, making them difficult to detect without reconciliation.
- Reconciliation helps identify over-reporting, under-reporting, and missing transactions by comparing front office data with regulator records.
- Regulators actively monitor whether firms are performing reconciliation, and failure to do so can signal non-compliance and trigger scrutiny.
- Regular, proportionate reconciliation strengthens controls, improves data quality, and reduces the risk of ongoing reporting issues.
Transaction Reconciliation (RTS 22 Article 15)
MiFID reconciliation is a regulatory expectation under MiFIR RTS 22 Article 15(3). This article explains how to detect silent errors by reconciling front office trading records against FCA MDP extracts, and how reconciliation helps identify missing reports, over-reporting and recurring control weaknesses.
Regulators are fully aware of how frequently firms conduct reconciliations. It is therefore in your interest to perform them regularly and thoroughly to reduce the likelihood of attracting regulatory attention.
Reconciliation is a regulatory requirement*, not a nice to have, and it is easy for the regulator to identify which firms are consistently carrying out reconciliations and, more importantly, which firms are not, since part of the process involves interacting directly with the regulator.
To perform a reconciliation, firms must request data from the regulator where available. For the FCA, this takes the form of an MDP file, obtained by executing entities through a data extract request on the MDP portal. By running a simple report, the FCA can quickly identify which firms have requested MDP files and which have not.
For the firms that do request MDP files, the FCA can also see how frequently they do so. Although there are no rules set in stone regarding how often reconciliation exercises must be carried out, the frequency should be proportionate to the size of the firm, its trade volume, and the complexity of the instruments traded.
Regulators take this requirement seriously. In the FCA's case, this is evidenced by the publication of not one but two Market Watch articles on the subject. Market Watch 65 reminded firms that MiFID II regulations (RTS 22, Article 15, Clause 3) requires firms to have arrangements in place to ensure transaction reports are complete and accurate. This includes testing and regular reconciliation against samples of trade data.
Market Watch 70 reinforced this message by publishing statistics showing how many firms were requesting and downloading their data - and, perhaps more importantly, highlighting the number of firms that were not. With the latter figure higher than the former, the FCA made clear that transaction reconciliation remains an area of active focus.
The FCA will likely use MDP Portal statistics as evidence of non-compliance with MiFID II regulations (RTS 22, Article 15, Clause 3). To avoid being caught out, firms should regularly request MDP files from the portal and reconcile them against their own trade files. If internal resources are limited, this process can be outsourced to third parties such as Qomply.
* MiFID II regulations (RTS 22, Article 15, Clause 3)
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 says reconciliation is required because firms must have arrangements to ensure transaction reports are complete and accurate. The article explicitly presents reconciliation as a regulatory expectation rather than a nice-to-have control.
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It is the data extract that executing entities request from the FCA's MDP portal for reconciliation purposes. The article says firms should compare that regulator extract with their own internal trade files to identify silent errors.
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It can tell because firms have to request MDP extracts from the portal to perform reconciliation. The article says the FCA can see which firms have requested files and the frequency of those requests.
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They show that reconciliation remains an active supervisory focus. The article says Market Watch 65 reminded firms of the RTS 22 obligation, while Market Watch 70 highlighted portal-request statistics and the number of firms that were not downloading their data.
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They should request MDP files regularly and reconcile them against their own trade records on a frequency proportionate to size, volume, and complexity. The article also says firms with limited internal resources can outsource the process to a third party such as Qomply.
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