The Financial Conduct Authority has warned the absence of enforcement action under Mifid II to date does not mean the regulator is satisfied with how the requirements are being implemented by the industry.
At a Treasury select committee hearing last month Andrew Bailey, chief executive of the FCA, said the regulator was yet to take any enforcement action under the new rules, choosing so far to focus on supervisory work instead.
But speaking at a Tax Incentivised Savings Association event in London today (February 7) Stephen Hanks, head of markets policy at the FCA, said absence of enforcement should not be interpreted as the regulator being "totally happy" with how the cost and charges rules are being implemented by firms.
Under the rules financial services firms must disclose a breakdown of actual costs and charges associated with the investments they sell to clients rather than estimates.
He said: "We have been having discussions with firms across a range of issues which are in the nature of supervisory intervention, but as was revealed at the Treasury committee session there are no pending enforcement cases in relation costs and charges.
"This shouldn't be taken as simply as we are entirely happy with what is going and are taking no action.
"It's just there is nothing that we have found that meets the requirements for taking an enforcement case, which is complicated and time and resource consuming."
On its work on transaction reporting under Mifid II, Mr Hanks said the quality of the reporting had largely improved over the course of the past 12 months.
But he added: "However there are still issues we see in reports and we are particularly disappointed to still be seeing errors in reports which would have been errors under Mifid, never mind Mifid II.
"So it's important for firms to be monitoring the nature of their reports, checking them and send us any errors and omissions - with particular focus on getting the fundamental economics of transactions correctly reported to us."
He added: "At its most basic, the errors we are seeing are zero in quantity or zero in price submitted for transactions."
Mr Hanks said the regulator had conducted a market watch under Mifid in which it found hundreds of thousands of reports featuring these type of errors on a rolling basis, and advised the current issues were a continuation of that problem.
The regulator is due to publish further work on cost and charges under Mifid II later this month.
Mr Hanks praised the financial industry for its work in cooperating to satisfy the requirements under Mifid and Mifid II, acknowledging much of this will have been done without guidance.
He said: "When it comes to costs, charges and product governance, I think one of the problems in Mifid is the regulations look good on paper but they require a lot of cooperation between firms and that kind of cooperation is not really spelt out in the legislation itself.