FCA Publishes Feedback on Smarter Digital Regulatory Reporting
FCA published the feedback statement FS18/2 on digital regulatory reporting. The statement follows the FCA request for input in February 2018 on how technology could achieve smarter regulatory reporting. In its call for input, FCA invited views on a "proof of concept" that could potentially make it easier for firms to meet their regulatory reporting requirements. The "proof of concept" outlined in the call for input was developed at the November 2017 TechSprint by FCA.
In the feedback statement, FCA summarized the feedback received from the Call for Input, set out the response received to the feedback, and explained the next steps. The feedback statement will be applicable to regulated firms, regtech (technology that helps meet regulatory requirements) firms, fintech (technology that helps deliver financial services) firms, technology and software providers, professional services providers, academics with interests in technology and financial regulation, and financial services regulators. Based on the feedback received to the Call for Input and the positive industry participation in the pilot, FCA's current position is that implementing digital regulatory reporting is a concept that the financial services industry considers worth investigating further by regulators. FCA is encouraged by the positive responses but acknowledged that it is still at a preliminary stage in its investigative work.
This “proof of concept” means that firms could map the reporting requirements directly to the data that they hold, creating the potential for automated, straight-through processing of regulatory returns. This could benefit both firms and regulators. FCA received 58 responses from a wide range of organizations including regulated firms, trade associations, technology providers, law firms, and consultancies. Some respondents provided technical comments on the "proof of concept" while others focused on other questions raised in the call for input. The most commonly cited benefit of digital regulatory reporting was an increase in efficiency through reductions in time and cost. Digital regulatory reporting could also increase the consistency of the information that is provided. Some firms expressed concern that the significant costs associated with implementing digital regulatory reporting may not outweigh the benefits. In addition, concerns were raised about possible liabilities associated with digital regulatory reporting, particularly with regard to the role of third parties providing technology solutions. Following the conclusion of the pilot work in November 2018, the pilot participants will publish a technical paper in the first quarter of 2019. This paper will provide an assessment of the technologies used to develop a digital regulatory reporting prototype during the pilot tests.
Related Links
- Notification
- FS18/2 (PDF)
- Overview of Digital Regulatory Reporting Initiative
- TechSprint, November 2017
Keywords: Europe, UK, Banking, Insurance, Securities, PMI, Fintech, Regtech, Reporting, Digital Regulatory Reporting, Responses to Consultation, FCA
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