FCA to Remove FX Derivatives from Scope of Transaction Reporting Regime

The UK Financial Conduct Authority has outlined new rules designed to make transaction reporting requirements smarter, simpler and more proportionate.

The changes aim to maintain accurate, high-quality data while removing duplicative or low-value reporting, reducing regulatory burden and supporting growth and competitiveness. The FCA said the measures will save firms more than £100 million per year.

The regulator confirmed it will proceed with its proposal to remove FX derivatives from the scope of the UK transaction reporting regime, citing persistent data quality challenges and the fact that such reports are often supplementary to other data collections. It added that UK EMIR data is a more appropriate and effective source for monitoring these markets.

The FCA acknowledged the move will create a data gap for UK branches of third-country firms and said it will explore how to address this as part of its work to repeal and replace OTC derivatives reporting requirements under Title II of UK EMIR.

During the implementation period from 3 August 2026 until the new rules take effect on 3 April 2028, the FCA will not take supervisory action against firms that do not submit FX derivatives transaction reports, provided those firms report the same transactions under UK EMIR. Firms that do not submit UK EMIR data, such as UK branches of third-country firms, must continue to meet applicable requirements during this period.

The change applies to options, futures, swaps, forward rate agreements and other currency-related derivative contracts settled physically or in cash, but does not apply to derivative contracts tied to cryptoassets.