Thinking twice about reporting once
15 September 2026
Following ESMA鈥檚 report on the simplification of transaction reporting, the authority is set to create a 鈥榬eport once鈥� approach to regulation; namely MiFIR, SFTR, and EMIR. Carmella Haswell investigates what this really means for the market
Image: stock.adobe.com/tadamichi
Earlier this summer, the European 网爆吃瓜 and Markets Authority (ESMA) released its final report on the simplification of financial transaction reporting. The report was born from numerous concerns regarding the cumulative burden generated by transaction reporting obligations across sectoral frameworks.
Market participants and national competent authorities have highlighted a number of challenges, including frequent and unsynchronised regulatory changes, inconsistent definitions, duplicative reporting of the same transactions, as well as data quality issues and associated resource implications in a fragmented reporting landscape.
As a key deliverable under ESMA鈥檚 broader Simplification and Burden Reduction initiative 鈥� aimed at addressing the growing complexity and operational costs associated with EU reporting requirements 鈥� the report sets out a path towards a 鈥榬eport once鈥� approach.
This staged approach looks to combine short-term burden reduction with a long-term structural reform. At the heart of this strategy is the development of a single integrated transaction reporting framework across the Markets in Financial Instruments Regulation (MiFIR), European Market Infrastructure Regulation (EMIR), and 网爆吃瓜 Financing Transactions Regulation (SFTR).
This integrated model would allow transaction data to be reported once through a common modular structure to reflect product specificities within one single framework. Such data can then be reused across authorities and supervisory mandates, reducing duplication while preserving the information needed for effective supervision.
While this approach may garner support from some of the market, especially given the onslaught of regulation it has faced over the past 20 years, concerns remain. Jonathan Lee, money markets reporting director at Kaizen, suggests that the reporting burden in Europe is significantly larger than in other jurisdictions and so the sight of significant cost savings will help to restore some of the continent鈥檚 competitiveness.
According to ESMA, the report once approach could allow for annual net savings of 鈧�250 million to 鈧�1 billion; a reduction in recurring costs of around 22鈥�24 per cent; and 10-year discounted cumulative net benefits of 鈧�1.2 billion to 鈧�4.9 billion.
Despite this, scepticism remains. Lee comments: 鈥淗owever, from an SFTR perspective, the proposals are much more limited, and firms may struggle to identify measures that would deliver significant savings any time soon for SFTR reporting. Reviewing and refitting SFTR is a long time coming, unfortunately this is not what is proposed here.鈥�
For Mark Steadman, managing director and head of Report Hub at Delta Capita, while there remains logic in this report once approach, given the push towards harmonisation and the years spent adapting to rewrites of the existing reporting regimes, he says moving to a new framework means 鈥渁nother major programme of work鈥� and more resources being diverted away from discretionary or revenue-generating initiatives.
He continues: 鈥淪o while the direction of travel makes sense, there is still scepticism about whether the eventual benefits will justify the cost and disruption required to get there. At the moment, the industry is very much waiting to see the details.鈥�
Reviewing the concept of a single framework and how this could impact the market, industry participants highlight that it provides an opportunity to remove duplication, improve consistency across reporting obligations, and reduce the number of regulatory change cycles and major revisions from three to one.
鈥淭here are a very limited number of shared fields, with areas such as pricing, direction of trade, and even parties to a transaction differing significantly between products and legacy regimes. This is very far from one size fits all,鈥� notes Lee.
Steadman says there is a natural overlap between MiFIR and EMIR, even though they serve different regulatory purposes. Where there are more reservations is around mandatory delegated reporting. He explains: 鈥淒ual-sided reporting provides an independent data-quality check because both counterparties report the transaction. Therefore, if one party reports for both sides, you risk losing some of that independent verification.鈥�
It would appear that the reality of this move hangs in the balance until the final design and implementation plans are revealed.
Lee warns that without careful implementation, firms could retain much of today鈥檚 operational complexity behind a more integrated reporting framework, while Steadman remarks that simplification on paper still needs to translate into simpler processes in practice.
A single integrated framework would not automatically create a single operating model inside firms, Lee continues. 鈥淢iFIR, EMIR, and SFTR reporting are often supported by different teams, systems, data sources, and product expertise, so bringing those together in practice could be a significant operational challenge.鈥�
SFTR you sure?
Now in operation for six years, SFTR remains one of Europe鈥檚 most resource-intensive transaction reporting regimes with up to 155 fields and 10 reportable action types.
Under the regulation, investment firms are required to report securities financing transactions (SFTs) to an authorised trade repository. With an aim to increase transparency in securities financing markets, the reporting requirements focus on repo; securities or commodities lending and borrowing; buy-sell back transactions or sell-buy back transactions; and margin lending transactions.
SFTR has historically benefitted from being broadly aligned across the EU and UK, making for a standardised approach to the SFTR regulatory operations function, informs Dean Bruyns, executive director, Cappitech by S&P Global.
He indicates that ESMA鈥檚 plans will mean that firms operating across both EU and UK regulatory frameworks will be assessing the potential impact of increasing divergence between ESMA and the UK鈥檚 Financial Conduct Authority (FCA). This divergence may require firms to adapt the way they manage their operations and could bring challenges for operations teams, Bruyns warns.
The case for integration appears less obvious for SFTR, given securities financing has different trading desks, source systems, and data characteristics.
鈥淭he infrastructure supporting repo and securities lending has matured significantly, in part because SFTR forced the industry to invest in it,鈥� comments Steadman. 鈥淏ut that does not necessarily mean folding SFTR into the same framework will deliver the same benefits.鈥�
He advises that ESMA demonstrate where genuine duplication exists and how combining these requirements will reduce the burden for firms. 鈥淎 common framework is only a simplification if it makes the underlying reporting process simpler.鈥�
Discussing whether the authority鈥檚 proposals go far enough to support SFTs, Lee suggests that proposals specific to SFTR risk a two-tier approach to reporting failing trades 鈥� one method for securities lending, and another for repo 鈥� therefore increasing the burden to in-scope firms.
Further, he believes that proposals around mandatory delegated reporting will require a great deal of refinement to be both workable and introduce efficiencies. Ideally, he says this would mean a move to fully single-sided reporting.
鈥淭hese proposals do not yet appear to go far enough to support SFTs, and treating SFTs too closely alongside derivatives risks overlooking important product and reporting differences. That could increase costs and affect reporting quality in the SFT space,鈥� Lee remarks.
Cost and data lead the charge
If there are two things that play quite a significant role in regulatory reporting, it is cost and data. With most regulatory undertakings, the price firms pay to revamp their teams, tech, and operations can result in a heavy burden. Similarly, the importance of quality data has become increasingly central to the securities finance industry as participants do away with manual processes and take on more regulatory responsibilities.
As previously mentioned, ESMA anticipates up to 鈧�1 billion of annual net savings. However, implementation costs are expected to be recovered within three to four years, after which efficiency gains would materialise on a sustained basis.
鈥淒epending on how far the proposals ultimately go, institutions could effectively be looking at another major rewrite of their regulatory reporting infrastructure,鈥� says Steadman. 鈥淭hat requires significant investment upfront, even if the objective is to deliver savings over the longer term.鈥�
Market participants highlight understandable scepticism regarding the eventual benefits. For instance, it is possible that savings could be unevenly distributed. Lee suggests sell side firms could see limited gains while bigger winners are likely to be large EU non-financial firms. Meanwhile, Steadman notes that if more reporting responsibility is delegated to larger dealers, they could initially take on a more disproportionate share of those costs.
鈥淚mplementation costs with a staggered approach are also likely to be very high, such that to realise the actual savings is a much longer term benefit, more like 10 years than 3鈥�4,鈥� Lee explains.
With a focus on implementation costs and payback period, this transition will not be made easier through the operational complexity of the change. Bruyns mentions that SFTR incorporates processes such as pre-submission pairing and matching and agent lender allocations which are not applicable to the other regulations.
He continues: 鈥淩egulators will also need to consider the impact on the infrastructure. Trade repositories who support SFTR and EMIR would essentially need to become approved reporting mechanisms, who support MiFID, and vice versa. It would be a significant structural change to the market.鈥�
Moving on to the data. A core question to answer for this report once transition is around what this would mean for data quality and controls across regulatory regimes.
To solve this, Lee suggests a more fundamental review of the basis of trade and transaction reporting in order to avoid introducing proposals which could deliver unintended consequences for data quality. The review in question could address whether activity reporting could be replaced by once a day open trade or to consider position level reporting.
He continues: 鈥淭he whole premise of SFTs, derivatives, and cash securities reporting should also be considered, with consideration to a move towards interest rate, credit, equity, commodity, foreign exchange risk-based reporting instead.
鈥淥ne other important point is that if the reporting requirement is simplified, regulatory expectations around data quality will be higher.鈥�
Steadman warns that simplification does not automatically mean better data quality. Large financial institutions have spent years developing mature controls around existing reporting regimes, he says moving to a new framework means those controls will have to be rebuilt.
鈥淪ure, there may be opportunities to rationalise controls where requirements overlap, but the underlying businesses and source systems remain different. Bringing SFT and derivatives reporting under a common regime, for instance, does not remove the need to reconcile data coming from different source systems,鈥� he explores. 鈥淭here is therefore a transition risk. As firms rebuild their systems and controls, data quality could initially deteriorate before the benefits of the new framework are fully realised.鈥�
The future of regulatory reporting
With much yet to be determined, market participants will have to await next step decisions by ESMA, and will need to play a core role in shaping the future of regulatory reporting, not just for that of the EU but that of the UK as well.
The direction of travel for Steadman is 鈥渦ndoubtedly heading towards greater consolidation and potentially more responsibility sitting with larger firms鈥� to report on behalf of their counterparties. Meaning the reporting burden could be redistributed, rather than simply disappearing entirely.
When it comes to how future steps could impact the UK, Steadman remarks that the FCA is already taking a more pragmatic approach to simplification, with recently announced MiFID changes as an example. Importantly, if the EU moves towards a fundamentally different reporting architecture and the UK follows a different path, Steadman says that the industry could see meaningful divergence here.
鈥淔or larger firms operating across both markets, that could actually increase costs if they have to maintain existing infrastructure for UK requirements while building a new framework for the EU,鈥� he warns. 鈥淪ome divergence is likely. The important question is how significant it becomes and how much additional complexity it creates for cross-border firms.鈥�
Lee notes that the UK is undergoing its own review of SFTR. He hypothesises that if the FCA and Bank of England are to take a bold approach 鈥� adopting once a day open trade/position level reporting, rather than activity-based lifecycle reporting for example 鈥� then the UK model may influence the EU approach if the EU is to remain competitive.
He concludes: 鈥淔irms should not fear pushing for harmonisation with simpler international regimes that work, such as OFR non-centrally cleared bilateral repo reporting in the US, rather than be married to 鈥榯his is how we鈥檝e always done things鈥�. Aim high, fortune favours the brave!鈥�
Market participants and national competent authorities have highlighted a number of challenges, including frequent and unsynchronised regulatory changes, inconsistent definitions, duplicative reporting of the same transactions, as well as data quality issues and associated resource implications in a fragmented reporting landscape.
As a key deliverable under ESMA鈥檚 broader Simplification and Burden Reduction initiative 鈥� aimed at addressing the growing complexity and operational costs associated with EU reporting requirements 鈥� the report sets out a path towards a 鈥榬eport once鈥� approach.
This staged approach looks to combine short-term burden reduction with a long-term structural reform. At the heart of this strategy is the development of a single integrated transaction reporting framework across the Markets in Financial Instruments Regulation (MiFIR), European Market Infrastructure Regulation (EMIR), and 网爆吃瓜 Financing Transactions Regulation (SFTR).
This integrated model would allow transaction data to be reported once through a common modular structure to reflect product specificities within one single framework. Such data can then be reused across authorities and supervisory mandates, reducing duplication while preserving the information needed for effective supervision.
While this approach may garner support from some of the market, especially given the onslaught of regulation it has faced over the past 20 years, concerns remain. Jonathan Lee, money markets reporting director at Kaizen, suggests that the reporting burden in Europe is significantly larger than in other jurisdictions and so the sight of significant cost savings will help to restore some of the continent鈥檚 competitiveness.
According to ESMA, the report once approach could allow for annual net savings of 鈧�250 million to 鈧�1 billion; a reduction in recurring costs of around 22鈥�24 per cent; and 10-year discounted cumulative net benefits of 鈧�1.2 billion to 鈧�4.9 billion.
Despite this, scepticism remains. Lee comments: 鈥淗owever, from an SFTR perspective, the proposals are much more limited, and firms may struggle to identify measures that would deliver significant savings any time soon for SFTR reporting. Reviewing and refitting SFTR is a long time coming, unfortunately this is not what is proposed here.鈥�
For Mark Steadman, managing director and head of Report Hub at Delta Capita, while there remains logic in this report once approach, given the push towards harmonisation and the years spent adapting to rewrites of the existing reporting regimes, he says moving to a new framework means 鈥渁nother major programme of work鈥� and more resources being diverted away from discretionary or revenue-generating initiatives.
He continues: 鈥淪o while the direction of travel makes sense, there is still scepticism about whether the eventual benefits will justify the cost and disruption required to get there. At the moment, the industry is very much waiting to see the details.鈥�
Reviewing the concept of a single framework and how this could impact the market, industry participants highlight that it provides an opportunity to remove duplication, improve consistency across reporting obligations, and reduce the number of regulatory change cycles and major revisions from three to one.
鈥淭here are a very limited number of shared fields, with areas such as pricing, direction of trade, and even parties to a transaction differing significantly between products and legacy regimes. This is very far from one size fits all,鈥� notes Lee.
Steadman says there is a natural overlap between MiFIR and EMIR, even though they serve different regulatory purposes. Where there are more reservations is around mandatory delegated reporting. He explains: 鈥淒ual-sided reporting provides an independent data-quality check because both counterparties report the transaction. Therefore, if one party reports for both sides, you risk losing some of that independent verification.鈥�
It would appear that the reality of this move hangs in the balance until the final design and implementation plans are revealed.
Lee warns that without careful implementation, firms could retain much of today鈥檚 operational complexity behind a more integrated reporting framework, while Steadman remarks that simplification on paper still needs to translate into simpler processes in practice.
A single integrated framework would not automatically create a single operating model inside firms, Lee continues. 鈥淢iFIR, EMIR, and SFTR reporting are often supported by different teams, systems, data sources, and product expertise, so bringing those together in practice could be a significant operational challenge.鈥�
SFTR you sure?
Now in operation for six years, SFTR remains one of Europe鈥檚 most resource-intensive transaction reporting regimes with up to 155 fields and 10 reportable action types.
Under the regulation, investment firms are required to report securities financing transactions (SFTs) to an authorised trade repository. With an aim to increase transparency in securities financing markets, the reporting requirements focus on repo; securities or commodities lending and borrowing; buy-sell back transactions or sell-buy back transactions; and margin lending transactions.
SFTR has historically benefitted from being broadly aligned across the EU and UK, making for a standardised approach to the SFTR regulatory operations function, informs Dean Bruyns, executive director, Cappitech by S&P Global.
He indicates that ESMA鈥檚 plans will mean that firms operating across both EU and UK regulatory frameworks will be assessing the potential impact of increasing divergence between ESMA and the UK鈥檚 Financial Conduct Authority (FCA). This divergence may require firms to adapt the way they manage their operations and could bring challenges for operations teams, Bruyns warns.
The case for integration appears less obvious for SFTR, given securities financing has different trading desks, source systems, and data characteristics.
鈥淭he infrastructure supporting repo and securities lending has matured significantly, in part because SFTR forced the industry to invest in it,鈥� comments Steadman. 鈥淏ut that does not necessarily mean folding SFTR into the same framework will deliver the same benefits.鈥�
He advises that ESMA demonstrate where genuine duplication exists and how combining these requirements will reduce the burden for firms. 鈥淎 common framework is only a simplification if it makes the underlying reporting process simpler.鈥�
Discussing whether the authority鈥檚 proposals go far enough to support SFTs, Lee suggests that proposals specific to SFTR risk a two-tier approach to reporting failing trades 鈥� one method for securities lending, and another for repo 鈥� therefore increasing the burden to in-scope firms.
Further, he believes that proposals around mandatory delegated reporting will require a great deal of refinement to be both workable and introduce efficiencies. Ideally, he says this would mean a move to fully single-sided reporting.
鈥淭hese proposals do not yet appear to go far enough to support SFTs, and treating SFTs too closely alongside derivatives risks overlooking important product and reporting differences. That could increase costs and affect reporting quality in the SFT space,鈥� Lee remarks.
Cost and data lead the charge
If there are two things that play quite a significant role in regulatory reporting, it is cost and data. With most regulatory undertakings, the price firms pay to revamp their teams, tech, and operations can result in a heavy burden. Similarly, the importance of quality data has become increasingly central to the securities finance industry as participants do away with manual processes and take on more regulatory responsibilities.
As previously mentioned, ESMA anticipates up to 鈧�1 billion of annual net savings. However, implementation costs are expected to be recovered within three to four years, after which efficiency gains would materialise on a sustained basis.
鈥淒epending on how far the proposals ultimately go, institutions could effectively be looking at another major rewrite of their regulatory reporting infrastructure,鈥� says Steadman. 鈥淭hat requires significant investment upfront, even if the objective is to deliver savings over the longer term.鈥�
Market participants highlight understandable scepticism regarding the eventual benefits. For instance, it is possible that savings could be unevenly distributed. Lee suggests sell side firms could see limited gains while bigger winners are likely to be large EU non-financial firms. Meanwhile, Steadman notes that if more reporting responsibility is delegated to larger dealers, they could initially take on a more disproportionate share of those costs.
鈥淚mplementation costs with a staggered approach are also likely to be very high, such that to realise the actual savings is a much longer term benefit, more like 10 years than 3鈥�4,鈥� Lee explains.
With a focus on implementation costs and payback period, this transition will not be made easier through the operational complexity of the change. Bruyns mentions that SFTR incorporates processes such as pre-submission pairing and matching and agent lender allocations which are not applicable to the other regulations.
He continues: 鈥淩egulators will also need to consider the impact on the infrastructure. Trade repositories who support SFTR and EMIR would essentially need to become approved reporting mechanisms, who support MiFID, and vice versa. It would be a significant structural change to the market.鈥�
Moving on to the data. A core question to answer for this report once transition is around what this would mean for data quality and controls across regulatory regimes.
To solve this, Lee suggests a more fundamental review of the basis of trade and transaction reporting in order to avoid introducing proposals which could deliver unintended consequences for data quality. The review in question could address whether activity reporting could be replaced by once a day open trade or to consider position level reporting.
He continues: 鈥淭he whole premise of SFTs, derivatives, and cash securities reporting should also be considered, with consideration to a move towards interest rate, credit, equity, commodity, foreign exchange risk-based reporting instead.
鈥淥ne other important point is that if the reporting requirement is simplified, regulatory expectations around data quality will be higher.鈥�
Steadman warns that simplification does not automatically mean better data quality. Large financial institutions have spent years developing mature controls around existing reporting regimes, he says moving to a new framework means those controls will have to be rebuilt.
鈥淪ure, there may be opportunities to rationalise controls where requirements overlap, but the underlying businesses and source systems remain different. Bringing SFT and derivatives reporting under a common regime, for instance, does not remove the need to reconcile data coming from different source systems,鈥� he explores. 鈥淭here is therefore a transition risk. As firms rebuild their systems and controls, data quality could initially deteriorate before the benefits of the new framework are fully realised.鈥�
The future of regulatory reporting
With much yet to be determined, market participants will have to await next step decisions by ESMA, and will need to play a core role in shaping the future of regulatory reporting, not just for that of the EU but that of the UK as well.
The direction of travel for Steadman is 鈥渦ndoubtedly heading towards greater consolidation and potentially more responsibility sitting with larger firms鈥� to report on behalf of their counterparties. Meaning the reporting burden could be redistributed, rather than simply disappearing entirely.
When it comes to how future steps could impact the UK, Steadman remarks that the FCA is already taking a more pragmatic approach to simplification, with recently announced MiFID changes as an example. Importantly, if the EU moves towards a fundamentally different reporting architecture and the UK follows a different path, Steadman says that the industry could see meaningful divergence here.
鈥淔or larger firms operating across both markets, that could actually increase costs if they have to maintain existing infrastructure for UK requirements while building a new framework for the EU,鈥� he warns. 鈥淪ome divergence is likely. The important question is how significant it becomes and how much additional complexity it creates for cross-border firms.鈥�
Lee notes that the UK is undergoing its own review of SFTR. He hypothesises that if the FCA and Bank of England are to take a bold approach 鈥� adopting once a day open trade/position level reporting, rather than activity-based lifecycle reporting for example 鈥� then the UK model may influence the EU approach if the EU is to remain competitive.
He concludes: 鈥淔irms should not fear pushing for harmonisation with simpler international regimes that work, such as OFR non-centrally cleared bilateral repo reporting in the US, rather than be married to 鈥榯his is how we鈥檝e always done things鈥�. Aim high, fortune favours the brave!鈥�
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