Buy-side exemption is necessary to eliminate duplicative reporting and protect UK competitiveness
London, UK – MFA warned in a comment letter submitted yesterday that the Financial Conduct Authority’s (FCA) proposed financial reporting reforms squander a chance to boost UK competitiveness and reduce unnecessary compliance costs by failing to adopt a broad buy-side reporting exemption.
Under the current framework, buy-side firms must maintain extensive reporting infrastructure — including systems, vendor relationships, reconciliation processes, and compliance staff — to meet transaction reporting obligations. These fixed costs weigh particularly heavily on smaller and growing firms. The FCA’s proposed conditional single-sided reporting does not eliminate this embedded infrastructure burden for globally active managers. As a result, the proposal leaves the core cost drivers of the regime intact.
“The FCA’s proposal does not go far enough,” said Jillien Flores, MFA Chief Advocacy Officer. “The current framework requires asset managers to maintain costly reporting infrastructure that delivers limited proportional benefit. Conditional relief will not materially reduce those fixed costs. The UK must remove unnecessary structural burdens and adopt a full buy-side exemption to meaningfully boost growth and competitiveness.”
MFA also recommended targeted changes to modernise the regime and reduce operational complexity, including:
- Consolidating reporting under the UK Markets in Financial Instruments Regulation (UK MiFIR), UK European Market Infrastructure Regulation (UK EMIR), and UK Securities Financing Transactions Regulation (UK SFTR) into a single, simplified reporting model.
- Providing an 18-month implementation period to give firms sufficient time to update systems and third-party arrangements.
- Reducing the default back-reporting period to three years and introducing a clear materiality threshold for errors and omissions reporting.
- Removing instruments traded only on European Union venues and excluding instruments whose principal liquidity is outside the UK.
Without more decisive reform, the UK risks maintaining a reporting framework that imposes disproportionate costs while delivering limited additional supervisory value. A simplified, proportionate regime will strengthen London’s position as a leading global financial centre.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
