Data quality review of Prudential regulatory reporting by MIFIDPRU investment firms

The FCA continues to focus on the poor quality of data which some firms submit in regulatory returns. Here is a summary of their recent findings and our recommended steps to make sure you are not creating negative attention from the regulators. We have seen that in some cases, questions on returns can escalate quickly into concerns over a firm’s capital, liquidity adequacy, and governance and risk management framework.

The FCA published their findings recently on the quality of data provided in the Prudential regulatory reporting of MIFIDPRU investment firms - although some of the feedback could apply to non-MIFIDPRU regulatory returns too. There is no new guidance in place, but the FCA have set out their concerns about the quality of data in regulatory returns in several recent publications, including their feedback on liquidity for wholesale brokers.

Some 3,800 firms submit MIFIDPRU regulatory returns on a quarterly basis, meaning the FCA was able to collate a large amount of data submitted in the period from January 2024 to March 2025. The implication is that all firms were included in the FCA’s data quality check.  Firms’ data was tested to see whether:

• it was consistent with the guidance in the MIFIDPRU Prudential sourcebook;

• it was broadly consistent with comparable data from alternative sources; and

• changes in the value of data points over time fell within a credible range.

Findings:

Only 60% of firms provided data that passed all the tests, 30% of firms showed some errors or have misreported, and 10% of firms showed significant failings with recurring errors.

In the FCA’s view, this “shows fundamental weaknesses in those firms’ regulatory reporting systems and controls”.

Errors highlighted include:

1. Inconsistent reporting across multiple data sources. For example, where the MIF007 does not reflect what was reported in the firm’s ICARA document.

2. Inaccurate implementation of guidance. The FCA give examples of where firms report an own funds threshold requirement that is lower than the own funds requirement.

3. Incorrect reporting of the type of investment firm. For example, non-SNI firms should be reporting K-factors.

4. Incorrect reporting units and data entry issues. For example, where firms report in single units and they should be in thousands.

Next steps

Several firms will receive an email from the FCA (presumably those in the 40% of firms failing the tests). It is likely those firms will need to correct and re-submit their returns. Potentially, these firms may discover they need to hold additional capital and liquid assets to satisfy the MIFIDPRU requirements. The FCA have also mentioned that there will be more detailed examples of data quality issues in a future IFPR Newsletter.

Implication for compliance monitoring

Reviewing what data is included in Regdata returns should be included in a firm’s compliance monitoring plan. We have often seen this review limited to checking that the returns were submitted on time. Clearly, the message from FCA is firms need to do more in this area.

How can we help you?

Ocorian have a Prudential team comprising of experts that include ex-FCA individuals who can help carry out reviews of regulatory returns, ensuring these are in line with the MIFIDPRU requirements. The Prudential team can also provide training in this area as well provide advice on all aspects of MIFIDPRU requirements.

If you would like to find out more, contact the team.