Introduction
On the 23rd of June 2025 ESMA issued a call for evidence “On a comprehensive approach for the simplification of financial transaction reporting”.
ESMA requests input from interested stakeholders on its proposals for eliminating inefficiencies duplications and other such encumbrances that emanate from disparate reporting rules such as EMIR, MiFIR, SFTR.
Transaction reporting under the aforesaid regimes, cost reporting entities between 1- 4 billion EUR per year, as per a 2019 study by the EU Commission. As the focus of the EU Commission has shifted towards simplifying and streamlining rules across the board, the Commission in January 2025 has set as its goal to reduce reporting burden for all companies across the board .
Aligning with the Commission’s goals ESMA considered 2 thematic categories for the simplification of reporting and for each thematic category, ESMA presented 2 reporting options.
It should be noted that for both options ESMA considers important to:
- Preserve information scope,
- Decrease reporting overlap,
- Ensure alignment with global reporting standards,
- Balance Cost and Burden.
To wit, while ESMA acknowledges that reporting regimes (SFTR, MiFIR, EMIR and others) serve different purposes e.g. MiFIR reporting provides NCA’s with a view of market activities and assists in the detection of instances of Market Abuse, EMIR provides a measure of risk buildup (especially counterparty default risk) as well as insights on how that risk is managed (clearing, collateral exchanges, risk reduction exercises etc.) and are triggered by different events there is substantial overlap between them in terms of information provided.
Option 1- Removal of Duplications
For this option ESMA is suggesting 2 different approaches to reducing reporting burden.
Delineation by Instrument Type
As most reporting entities are aware, in the EU (and the UK) derivatives reporting also captures derivatives listed on Regulated Markets and OTC derivatives. In other jurisdictions such as Canada, Australia and Singapore, only OTC derivatives are captured by the aforesaid obligation.
As such for this proposal, ESMA is considering limiting the perimeter of EMIR reporting for OTC derivatives only. Currently an ETD listed on e.g. Eurex is doubly reported under both EMIR and MiFIR. ESMA is asking for feedback whether transaction reporting of such ETDs could be carried out under MiFIR only, while post-transaction events (valuations/collateral) for ETDs should be sourced from the Clearing Houses (CCPs) of the Regulated Market where the ETD was executed.
In such a case OTC derivatives remain unaffected. Similarly, SFTR obligations are also unaffected.
Delineation by Events
ESMA is proposing to report all transactions (whether EMIR, MiFIR, SFTR) under MiFIR while post trade events such as valuations, collateral updates etc would be EMIR reportable (for derivative trades) and SFTR (for SFT trades).
This implies that all new transactions whether they are on bonds, shares, margin lending, repos, CFDs, forwards, swaps etc. would be reported as new trades under MiFIR, while Valuation Updates, Collateral Updates, Novation events, Compressions, etc. would be reported under EMIR (for derivatives). SFTR reporting (similar to EMIR) will only be focusing on post trade events (e.g. valuation, margin updates etc.).
Option 2- Report Once Principle
ESMA is considering the creation of a unified reporting template i.e. collapse all reporting obligations into a single report reported via a unified channel. For this option ESMA is proposing 2 (very similar) approaches, one is to collapse EMIR/MiFIR/SFTR into a single report, while the other approach includes a scenario whereby non-ESMA reporting (i.e. reports not under ESMA’s mandate) could be included in the unified template e.g. Energy reporting REMIT (currently under ACER’s mandate) or Solvency II reporting (EIOPA).
Of the 2 options (each with 2 approaches), ESMA recognises that the Report once Principle would be the most cost effective in terms of reducing the overall reporting burden. Nevertheless, ESMA also acknowledges that such a radical approach may incur additional costs for affected parties as they would need to reconfigure reporting processes, including investing in IT, training staff, merging siloed data and so on. Moreover, the Authority further acknowledges that such an approach may require substantial amendments to legal texts and time till it is finally implemented.
Other Issues
Dual Sided Reporting
For both options ESMA is asking for input on the possible revision of the dual sided reports, i.e. where both counterparties to a trade/SFT will need to report and reconcile said reports. ESMA acknowledges that if the requirement for dual-sided reporting is abolished NCAs may need to take additional steps to dispense their supervisory duties, such as performing full audits on firms.
Reporting at Position Level
For a few of the proposals ESMA is also suggesting abolishing the allowance for position level reporting (applicable for EMIR/SFTR but not for MiFIR) and, instead, the position is calculated based off the transaction reports. ESMA acknowledges that such a move may be difficult given that for ETDs as well as some OTC derivatives and some SFTs risk, collateral, valuations are always calculated at a position level.
Next Steps
ESMA will consider feedback/input it receives by 19 September 2025 and expects to publish at the beginning of 2026 a final report, outlining the key areas and the preferred simplification option/approach.
ESMA has further indicated that it will not put forward any new suggestions for changes to MiFIR transaction reporting for which it has consulted in 2024 (refer to our blog here for an overview) pending the outcomes of this Call of Evidence. ESMA has nonetheless produced a final report on the issue in which they record respondents’ preferences and comments (MAP FinTech participated in that consultation).
As ESMA notes, irrespective the outcome of this exercise it will be years before any changes come into effect. Characteristically for option 1 (which is the easiest of the 2 to implement) ESMA expects that implementation timeframes would be approximately up to 5 years.
MAP FinTech, in the spirit of assisting its clients to comply with their reporting obligations accurately and with cost efficiency, intends to constructively participate in the Call for Evidence.