The ESMA transaction reporting reform published this month sets out a plan to unify three separate EU reporting regimes into a single framework, with the European Securities and Markets Authority (ESMA) estimating potential annual savings of up to €1 billion for firms operating across European markets.
For UK-based firms trading derivatives or securities on EU venues, or with EU counterparties, the proposals have direct operational relevance, even though the UK has its own post-Brexit reporting rules.
What the ESMA Transaction Reporting Reform Actually Proposes
At present, firms must report similar trade data under three overlapping EU regulations: MiFIR (which covers transactions in financial instruments), EMIR (which covers derivatives contracts), and SFTR (which covers securities financing transactions such as repo and stock-lending deals). Each regime has its own data fields, formats, and submission requirements. Firms frequently submit near-identical information multiple times, under slightly different rules.
ESMA’s Call for Evidence on simplifying financial transaction reporting, published on 23 June 2025, is the formal starting point for gathering industry input on how to fix this. It sits within ESMA’s broader Simplification and Burden Reduction initiative, which targets the growing compliance costs across EU reporting frameworks.
ESMA Chair Verena Ross described the problem directly: ‘Transaction reporting is central to market transparency, risk monitoring and detecting market abuse. However, over time, fragmentation has led to duplication, inconsistent requirements and increased costs for market participants and authorities.’
Two Scenarios, One Long-Term Direction
According to the Linklaters Financial Regulation analysis of ESMA’s interim report, the consultation sets out two policy scenarios.
The first, a near-term fix, would draw clearer lines between the three regimes based on the type of instrument involved. Under this approach, over-the-counter derivatives (OTC derivatives, meaning privately negotiated contracts traded off-exchange) would be reported exclusively under EMIR, while exchange-traded derivatives would fall under MiFIR. The aim is to eliminate the current overlap where the same trade can trigger obligations under more than one regime.
The second and longer-term scenario is the more radical one: a single unified reporting template covering MiFIR, EMIR, and SFTR together. This is the “report once” model referenced in the headline figures. One submission, covering all three regimes, replacing the current patchwork.
A specific weakness flagged in both scenarios is EMIR’s dual-sided reporting model. Under the current rules, both counterparties to a derivatives trade must submit their own separate report. As ION Group notes in its analysis of the consultation, this structure is prone to data mismatches and duplication, and it is under review regardless of which scenario ESMA ultimately pursues.
What Firms Should Not Expect in the Short Term
A key detail buried in the consultation: ESMA has confirmed it will not make any short-term changes to the existing MiFIR reporting rules under RTS 22, RTS 23, and RTS 24 (the regulatory technical standards that specify exactly what data firms must submit) while the Call for Evidence is running. The Simmons & Simmons summary of the proposals confirms this explicitly.
Current operational requirements remain unchanged. Firms should not delay compliance upgrades on the expectation that the rules are about to shift.
The formal mandate to complete this work comes from the MiFIR Review (implemented through Regulation (EU) 2024/791), which instructed ESMA to explore integration across the three regimes. The deadline for ESMA to deliver final recommendations to EU legislators is March 2028.
Why This Matters Beyond the EU
UK firms are not subject to ESMA’s rules directly, but many operate under both UK and EU reporting obligations simultaneously, through EU branches, subsidiaries, or cross-border trading activity. A genuine simplification of the EU framework could reduce the divergence between UK and EU requirements that compliance teams currently navigate.
The €1 billion annual savings estimate also gives a sense of scale. Even a fraction of that figure, spread across the industry, represents material cost reduction at a time when post-trade infrastructure spend remains under scrutiny from boards and investors alike.
According to The Trade, ESMA will now engage with EU institutions to determine the next steps following publication of the final report. With the March 2028 deadline in view, the window for industry to shape the outcome through the Call for Evidence process is open now.
