FCA Fines Sigma Broking £1.09M for Years of Transaction Reporting Failures
2025-08-04In this article
Date of Notice: 29 July 2025
Reporting Failures: 924,584 transactions
Period: 1 December 2018 – 1 December 2023
MiFIR Breach: Article 26
Principal Breach: FCA Principle 3 (Management & Control)
A Pattern of Oversight Failures
The UK’s Financial Conduct Authority (FCA) has issued a £1.09 million fine to Sigma Broking Limited for failing to submit accurate transaction reports over 5 years. These errors impacted nearly every reportable transaction the firm executed 924,584 out of 927,502 trades were incorrect or incomplete.
This is not the firm’s first regulatory failure: in October 2022, Sigma was previously fined for CFD and STOR breaches. Despite that warning, no meaningful remediation was implemented across its MiFID II transaction reporting infrastructure.
What Went Wrong
Sigma’s case outlines three key areas where many investment firms continue to fall short:
- System Configuration Failures
Sigma’s reporting logic was incorrectly set up during the original MiFID II go-live in 2018. The issues—ranging from incorrect buyer/seller roles to misreported instruments—persisted unnoticed for years. This demonstrates how one-time misconfigurations, if not validated and maintained, can become systemic risks. - Lack of Ongoing Controls and Governance
There were no effective reconciliation processes, field-level data quality checks, or alerts to detect data anomalies. The firm’s control framework did not evolve despite repeated FCA publications urging firms to self-assess. - Back Reporting & Remediation Delays
Despite FCA intervention in 2023, Sigma delayed admitting the extent of the failures until 2024 and only completed back-reporting corrections in 2025. That lag highlights the importance of scalable remediation capabilities and structured change management.
How Firms Can Respond Effectively
The Sigma case serves as a cautionary tale. Other firms can and must strengthen their transaction reporting through three key areas:
Back-Reporting & Historical Corrections
- Firms should maintain detailed historical archives of submitted reports and source trade data.
- Mechanisms must be in place to reconcile legacy trades (up to 5 years back under MiFIR) and regenerate corrected transaction reports (e.g., via RTS 22-compliant XML) with proper sequencing and event timestamps.
- Correction files must track root causes (field-level) and reflect appropriate action types (Corrections vs Voiding), as required by ARM and NCAs.
Reporting Logic Review & Configuration Audit
- Firms should periodically audit the full transaction lifecycle, starting from order capture and execution platforms to the transaction-reporting engine.
- Special attention should be given to configuration mismatches: e.g., buyer/seller determination, client/venue identifiers, instrument classification (CFI/ISIN), and flags like ‘short sale’ or ‘algorithm used’.
- When regulatory regimes change (e.g., RTS 22 updates or reference data schema revisions), those configurations must be validated across front-office and middleware layers.
Controls, Reconciliation, and Escalation
- Reconciliation dashboards (e.g., between internal trade books and ARM/TR submissions) should detect drop-offs, mismatches, or rejected messages.
- Data Quality thresholds should be aligned with ESMA and FCA expectations, such as ensuring the population of buyer/seller LEIs, use of MICs from official lists, and valid instrument reference data.
- A governance process, such as weekly exception reporting, quarterly reviews, and senior management oversight, can prevent extended error cycles.
| Failure Area | Risk | Best Practice Response |
|---|---|---|
| Misconfigured Logic | Systemic under-reporting of buyer/seller | End-to-end rule validation, especially for legacy flows |
| Weak Oversight | Missed detection of erroneous reports over 5 years | Field-level data checks, cross-report reconciliations |
| Late Corrections | Delayed trust recovery with regulators | Maintain structured, versioned back-reporting workflows |
| Ignored FCA Guidance | Regulatory aggravation, increased fine | Map Market Watch issues to firm’s internal controls |
The FCA’s tone in this case is clear: firms cannot claim ignorance when guidance is publicly available. Errors that persist for years due to weak oversight, faulty configurations, and passive governance are no longer excusable.
Firms that take proactive steps—auditing their configurations, remediating legacy issues, and implementing robust controls—can avoid repeating the mistakes that cost Sigma millions and tarnished its reputation.
