Clients are required to submit Derivative Use Reports to the FCA for all funds that hold derivatives as of the end of the reporting period.

Any UK or EEA UCITS that holds derivatives must submit the report.

Derivatives are defined by the FCA as “a contract for differences, a future or an option”1 as well as other securitised derivatives. N.B. The FCA Derivatives Use report also encompasses forwards, swaps, warrants and all other derivatives.

The changes to reporting introduce quantitative disclosures, more akin to the requirements already in place in Luxembourg and Ireland.

For background regulatory information on FCA Derivative Use Regulatory reporting, click here.

Funds-Axis FCA Derivatives Use White Paper
Links to the relevant Regulation and FCA guidance
Funds-Axis e-Learning

The Template of the report can be found here, together with notes on all the fields.

For procedure notes on how to run the FCA Derivative Use report, click here.

This also includes information on how to maintain the static data and also on recommended governance.

The FCA Derivative Use Reporting requires a range of static information, including in respect of the Manager and the Fund. This includes simple information, such as:

This information is captured in the Manager or scheme Master in Fundware. It can be manually added/edited, or custom uploads can be used for bulk uploads.

Below is a summary of these fields and also of standard system defaults.

Several static data fields are populated from the Manager Master.

The majority of the static data is contained within the scheme master.

An overview of each field of the first page of the FSA042 report is laid out below, along with the appropriate FundsWare field name and any system defaults.

Derivatives used for investment purposes (Y/N);

Note: in addition to manual adding and editing, this detail can also be auto-uploaded via “custom uploads.” Click here for details.

The FCA Derivative Use Report requires that a specific data taxonomy be applied to the classification of derivatives when reporting. The required data taxonomy can be found here.

Note: the assignment of derivatives to this taxonomy is handled automatically within the system using Rule Custom Attribute for “FCA Derivative Type.” Where manual overrides are required, this can be done in the Instrument master; click here for more details.

The FCA Derivatives Use Report requires a number of calculations. the following calculations are automatically produced within the system:

Gross long & short derivative positions (%)
Commitment approach – Mean of all calculations over the past 12 months

For section 4 of the report, you report “Yes” against each of the derivative types held during the year.

For each of these fields for each derivative type, this is auto-populated as “Yes”, if the count by fund of the number of instruments under each “Rule custom attribute. FCA derivative type” is > 0 as at 31 October 2018. See further notes in word doc. In this regard, please note that the FCA Derivative Use report needs consideration of derivatives held throughout the year, not just at end of October. Accordingly, a review should be performed to ensure that the year end report is correct.

We recommend that clients perform a range of governance and oversight when preparing their FCA Derivative Use Reports.

Click here for more details.

Click on the below links for more information on:

Notes on the data fields

The FCA Derivative Use Report needs to be submitted on the FCA’s Gabriel system in xml format.

Click on the links for details on:

Submitting the XML Report on Gabriel

Common Error Messages

For more information on our FCA Derivative Use Reporting services, please click below.