FSA to sell reporting system to the London Stock Exchange

The Financial Services Authority (FSA) has agreed to sell its approved reporting mechanism known as the Transaction Reporting System (TRS) to the London Stock Exchange for £15m. The sale must be approved by the Office of Fair Trading.

The TRS is a mechanism established in the UK for reporting company transactions in regulated instruments in accordance with FSA rules and the European Union’s Market in Financial Instruments Directive (MiFID).

The FSA uses this information to detect and investigate suspected cases of market abuse, insider trading and market manipulation. It is also used as part of its monitoring of the activity of supervised companies.

The introduction of MiFID in November 2007 increased the volume and scope of information firms are required to report. The directive subsequently established a regime and systems through which transactions are reported known as ARMs or approved reporting mechanisms.

The FSA developed the TRS to provide firms with a method for meeting their MiFID reporting obligations. There is now a competitive market for the provision of transaction reporting services in which the LSE operates its own ARM service through its UnaVista platform.

The UK regulator said it is confident that the ARM market is now sufficiently developed to enable firms to meet their reporting obligations. The FSA believes that maintaining an ARM no longer forms part of its core role as a regulator.

The LSE’s UnaVista system offers additional services beyond those which are currently offered by TRS which may be of benefit to TRS clients, the FSA said. The LSE plans to migrate TRS customers to its UnaVista platform on completion of the transaction.

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