ESMA provides interim update on transaction reporting reform

As part of its broader simplification and burden reduction agenda, ESMA has published its interim report on its call for evidence on a comprehensive approach for the simplification of financial transaction reporting across MiFIR, EMIR and SFTR (and potentially other) regimes.

The interim report summaries feedback from 108 responses to the call for evidence which was launched in June 2025 (see our earlier client note), alongside separate insights gathered from 14 meetings involving 25 stakeholders.

Although the report does not yet contain policy recommendations, it does confirm the policy options which ESMA is going to pursue, indicating that EU transaction reporting reforms will, first, focus on near-term efficiencies through clarifying reporting requirements for different instruments and reviewing dual-sided reporting requirements and, in the longer term, a move towards a “report once” model which envisages a single transaction reporting framework and template capturing MiFIR, EMIR and SFTR transaction reporting data considered to be of value for systemic risk monitoring, supervision or statistical analysis. 

ESMA will continue to engage with market participants, including through an open hearing on 28 May 2026, before setting out its final recommendations which are expected in a final report to be published by July 2026. Importantly, the final report will include a thorough cost-benefit analysis (CBA) carried out by independent consultants assessing the impact of proposals for market participants, alongside a CBA carried out by ESMA which will consider the costs / benefits of proposed changes for regulators and supervisors. 

Key principles for reform

ESMA’s proposals for transaction reporting reforms will be based on the following principles:

• Preserving information value – meaning that data that is genuinely required for systemic risk monitoring, supervision or statistical analysis should continue to be reported. This does not mean that all data fields would necessarily be retained (although this is outside the scope of the Level 1 review and would be considered by ESMA when reviewing Level 2 at a later stage). 

• Decrease overlaps – which, beyond looking at multiple reporting obligations, should also consider how better coordination and data sharing between supervisors and other authorities may help to reduce reporting burdens for firms. 

• Pursue global alignment – with ESMA acknowledging that alignment may not always be possible (or sometimes desirable). 

• Balance costs and benefits – with analysis taking account of short term and longer-term impacts of proposed reforms on market participants as well as supervisors. 

Direction of travel

Of the four scenarios originally presented in the call for evidence, ESMA will focus on developing and assessing: 

• In the near term, Scenario 1a – which, in the short term, envisages delineating reporting obligations based on the type of instrument and aims to eliminate duplicated reporting of instruments (with a particular focus on distinguishing between OTC derivatives which would be reported under EMIR, and ETDs, which would be reported exclusively under MiFIR). ESMA confirms in the interim report that derivatives executed on (non-equivalent) third country venues are treated as OTC derivatives under EMIR, and ESMA does not foresee this changing as part of the transaction reporting review. Feedback confirms the need to reduce the burden associated with dual-sided reporting under both EMIR and SFTR and linked reconciliation processes, and ESMA has indicated that it will consider including SFTR with regard to revisions to dual-sided reporting (see variants of Scenario 1a below).

• This will serve as a “pathway” for longer term changes over five to seven years through Scenario 2a – which envisages establishing a “report once” framework integrating transaction reporting under MiFIR, EMIR and SFTR within a single reporting template.

ESMA will not pursue Scenario 1b (event-based delineation) and Scenario 2b (expanded “report once”) in light of the feedback received.

Sub-variants of Scenario 1a

ESMA has defined three sub-variants of Scenario 1a, all of which will be included in the CBA, meaning that ESMA is considering all of these options before finalising its proposals in the final report. ESMA explains that these sub-variants are not alternatives to Scenario 2a, but could potentially be implemented as intermediate steps to provide earlier relief ahead of implementation of the more comprehensive “report once” framework:

• Option 1ai (with schema changes): This retains the CfE approach with targeted schema modifications to preserve supervisory capabilities to perform market abuse monitoring and systemic risk oversight. It also includes a review of dual-sided reporting under EMIR Refit and SFTR, notably the expansion of mandatory delegated reporting to all counterparties, along with the removal of reconciliation processes linked to pure dual-sided reporting.

• Option 1aii (without schema changes, no delineation): This focuses on reducing costs associated with dual-sided reporting through expanded delegated reporting, without introducing delineation between ETDs and OTC derivatives.

• Option 1aiii (without schema changes, with delineation): This introduces a partial separation between ETDs and OTC derivatives (e.g. excluding EU ETDs from EMIR), while maintaining the current MiFIR scope for OTC derivatives. This also includes expanded delegated reporting to all counterparties, along with the associated reconciliation process.

Across all these three variants, run consistent themes:

• Expansion of delegated reporting obligations.

• Removal of reconciliation requirements linked to dual-sided reporting.

• Continued focus on data quality through the preservation of the communication mechanisms ensuring alignment between counterparties.

Importantly, responding to feedback from the buyside, ESMA has confirmed that Option 1a will not include an expansion of transaction reporting obligations for AIFMs and UCITS managers, as this would be contrary to the review’s aims of simplification and proportionality. 

Level 1 (and Level 2 and 3) changes

A key takeaway from the report is ESMA’s acknowledgement that even the “quick wins” and “low-hanging fruits” of meaningful reform for this simplification exercise are dependent on Level 1 legislative changes. This means that while the final report will set out policy recommendations, implementation will depend on action by the European Commission, Parliament, and Council. As such, implementation should be expected in the medium term. 

Feedback also indicated a desire for greater regulatory flexibility at Level 2 and 3 in order to ensure that the reporting framework is adaptable in due course. ESMA’s report does indicate that some feedback received (such as on the granularity of derivatives identifiers, inconsistent data controls or the need for specific reporting fields) will be considered as part of Level 2 and 3 changes which will follow later (although some of these may need to be reflected in Level 1). 

ESMA has included a list of Level 1 changes (based on suggestions for burden reduction received in response to the CfE) which give an indication of proposals ESMA may put forward in the final report. These include:

• Reducing the back reporting period (provided that regulators could still require back reporting for up to five years in the event of serious reporting failures);

• Clarifying ETD reporting scope;

• Excluding certain corporate actions and other transaction from MiFIR reporting (where these are not essential for market supervision / monitoring); and

• Simplifying intragroup reporting under EMIR.

Documents

ESMA’s interim report is available here.

ESMA’s press release published on 4 May 2026 is available here.

Read our earlier client note on ESMA’s call for evidence from June 2025 here.