The regulator is proposing to remove foreign exchange derivatives from reporting requirements as well as remove reporting requirements for six million financial instruments including equities, bonds and certain derivatives that are only traded on EU trading venues. It also wants to reduce the period for correcting historic reporting errors from five to three years, which would lower the number of transaction reports that need to be resubmitted by a third. The move should reduce the current cost of dealing with over seven billion MiFID transaction reports a year from nearly £500 million to around £400 million. Therese Chambers, joint executive director of enforcement and market oversight, FCA, says: "Transaction reports are essential, helping us to detect financial crime and monitor the resilience of our markets. But we can be smarter, and by clarifying and streamlining requirements we expect to receive more accurate and complete reports. "Reducing costs while improving the quality of the data we receive is a no-brainer. It means we can support growth and receive better market intelligence to act on." However, the plan does not go as far as some industry players wanted. Hedge funds had called for the removal of all reporting requirements for buy-side investors, as is the case in the US and Japan. This was rejected because, says the FCA, of the UK market’s "international nature" which means that more than half of transactions are carried out by buy-side firms. Adam Jacobs-Green from the Alternative Investment Management Association tells the Financial Times that the group is "disappointed that UK fund managers are not removed from the transaction-reporting rules entirely". Rollo Burgess, partner at Capco, welcomes the reforms but adds: "A thoughtful simplification of obligations of reporting requirements should not increase operational risk, but there is a potential risk in divergence between the UK and other jurisdictions. "This needs careful focus, as managing diverging regulatory environments could introduce complexity, contrary to the spirit and intent of these proposals."