ESMA’s final report proposes annual net cost savings of up to EUR 1 billion through simplification of financial transaction reporting

ESMA has published its Final Report on the Call for Evidence for the simplification of financial transaction reporting, which proposes significant reforms to reduce duplicative, overlapping and fragmented transaction reporting across different legislative regimes (including MiFIR, EMIR and SFTR). ESMA proposes a move to a “report once” transaction reporting model which could be in place by H2 2031, which ESMA predicts could result in annual net cost-savings (over the longer term) of up to EUR 1 billion. In addition to mapping out the steps for the “report once” model, ESMA has also proposed several intermediate measures which could be implemented in the short to medium term. These include proposals to reduce the back reporting period from five to three years, refine transaction reporting exemptions to exclude transactions that are less relevant to market abuse surveillance, and deprioritise certain RTS 22 and 23 fields (such that NCAs would be discouraged from taking supervisory action for non-compliance).

Read on for a summary of key points from ESMA’s final report.

Background

The final report follows ESMA’s 2025 call for evidence (on which see our client note) and its May 2026 interim report (on which see our earlier blog post) and builds on feedback gathered through 108 responses to the Call for Evidence, dedicated workshops, a data day and a public hearing. This initiative forms part of the wider EU simplification and burden reduction programme. 

Cost drivers and expected savings

An independent cost-benefit analysis (CBA) conducted by Deloitte alongside ESMA’s own CBA validated three structural drivers as most material:

1. Regulatory complexity from frequent and unsynchronised changes - change-management costs (covering requirements definition, project management, data model adjustments, testing and deployment) represent a material share of total reporting costs, of a similar order of magnitude to ongoing run costs for major reporting entities.
    
2. Duplicative reporting and fragmented channels - economically equivalent transactions, particularly in derivatives, are reported multiple times under different regimes using different schemas, validation rules and submission routes, requiring firms to maintain parallel pipelines and multiple reporting infrastructures.
    
3. Dual-sided reporting and reconciliation — dual-sided reporting under EMIR and SFTR is one of the top cost drivers, with reconciliation activities absorbing a substantial share of ongoing reporting effort without commensurate supervisory value where reported information is largely duplicative.

Current annual operating costs under the existing MiFIR, EMIR and SFTR reporting frameworks are estimated to range from approximately €1 billion to €4.2 billion.

The report's headline figures for expected costs savings from the proposed reforms are significant. The CBA indicates that adopting the "report once" target scenario would deliver:

• Annual net savings of €250 million to €1.0 billion.
• A reduction in recurring costs of around 22%–24%, close to the European Commission's objective of reducing reporting and administrative burdens by 25%.
• Ten-year discounted cumulative net benefits of €1.2 billion to €4.9 billion.
• For public authorities, the reforms could lead to an average reduction of around 9–11% in ongoing annual costs, depending on the degree of centralisation ultimately adopted.

Implementation costs are expected to be recovered within three to four years, after which efficiency gains would materialise on a sustained basis.

ESMA's Recommendations: A Staged Approach

As indicated in its interim report, ESMA’s proposed reforms are based on four principles:

• Preserving information value.
• Reducing overlaps and duplication.
• Pursuing global alignment (including the use of internationally recognised standards and identifiers).
• Balancing costs and benefits.

Applying these principles, ESMA recommends a two-track strategy, as follows:

1. Long-term "Report Once" Framework (Scenario 2a)

ESMA recommends introducing targeted Level 1 amendments to MiFIR, EMIR and SFTR to establish a single integrated transaction reporting model, whereby market participants submit transaction-related data once to meet the transaction reporting requirements across all three regimes. Key features include:

• A single, modular set of reporting templates covering information needs across MiFIR, EMIR and SFTR, avoiding duplicative data points. Templates would be modular to ensure data completeness and quality, without duplications. More work is clearly needed to work out the details for this, which ESMA notes will involve industry technical experts, NCAs, additional evidence (including through consultations) and targeted assessments (similar to relevant engagement with market experts in the context of T+1 settlement).
   
• Rationalisation of reporting channels — merging existing reporting infrastructures under EMIR / SFTR and MiFIR, and decommissioning parallel reporting channels (i.e. trade repositories and approved reporting mechanisms) into one single type of reporting infrastructure. ESMA has outlined three potential implementation models to achieve this, with different levels of centralisation for data sharing, processing and storage. The existing decentralised model would keep data storage, processing etc., at national level, a hybrid model would involve data storage, processing validation and analytics at EU-level while allowing additional NCA analysis, and a fully centralised model would replace all national channels and functions.
   
• A clear allocation of responsibilities between national and EU-level functions, with enforcement of reporting requirements remaining with NCAs.
   
• Phased implementation, starting with a model to reduce reporting channels, and allowing integrated solutions to evolve over time (e.g. through flexibility to develop reporting formats, data models and transmission protocols).  

ESMA’s interim report had also listed a potential intermediate step (Scenario 1a) involving instrument-based delineation and targeted schema changes. In the final report, ESMA has decided not to recommend this approach, as it would entail non-negligible implementation costs without delivering commensurate benefits, and risked creating sunk costs ahead of the eventual transition to the full “report once” framework.

2. Near-term Independent Intermediate Measures

To deliver earlier relief without waiting for full structural reform, ESMA proposes eight targeted measures which can be implemented more quickly, have proportionate implementation costs and are compatible with the eventual move to the “report once” framework.

Some of these interim measures would, themselves, require Level 1 legislative changes: 

• Expansion of delegated reporting, such that transactions between a financial counterparty and a non-financial counterparty should be reportable by the financial counterparty on behalf of both sides (with NFCs required to provide necessary information), building on existing frameworks under Article 9(1a) of EMIR and Article 4(3) of SFTR, with associated reconciliation requirements removed. ESMA proposes leaving arrangements for FC-FC and NFC-NFC transactions to be specified at Level ⅔.
   
• Streamlining intragroup exemption notifications and reporting frequency by replacing multiple NCA notifications with a single centralised submission covering all group entities, and reducing the frequency of net aggregated position reporting at parent level from weekly to monthly.

Some of the interim measures would require amendments to Level 2 or 3:

• Reducing the back-reporting horizon from five years to three years under MiFIR, with NCAs retaining discretion to require up to five years in serious cases. This reflects similar recent proposals made by the FCA in the UK.
   
• Targeted MiFIR transaction reporting exemptions for transactions do not provide material value for market abuse surveillance. In particular, these would include  creation/redemption of fund units by fund managers and administrators, certain corporate actions of an operational nature, and transactions in respect of employee share incentive plans below a monthly threshold (which could be set at EUR 2,000).
   
• Deprioritising targeted MiFIR RTS 22/23 fields whereby NCAs would not prioritise supervisory actions for a number of RTS 22/23 fields (listed on page 45 of the final report), provided that their reporting does not raise any material data quality or supervisory concerns. These include the short selling indicator (which reflects a welcome change to Level 1 MiFIR made as part of the MiFIR Review but which is yet to take effect due to changes to RTS 22), seniority of bonds, various fields relating to options, and certain values in the OTC post-trade indicator field which no longer align with revised RTS 2 deferral flags. Firms may continue to report the relevant fields if that would be operationally easier. ESMA has suggested that deprioritising these fields would not require changes to reporting schema.
   
• Targeted adjustments to EMIR reconciliation fields in particular, excluding the free-text "Name of the underlying index" field from reconciliation matching. ESMA will also monitor reconciliation metrics across other fields, and additional amendments may follow. 
   
• Simplification of the Errors and Omissions (E&O) notification framework under EMIR Refit, reviewing materiality thresholds and E&O processes and related Level 3 guidance.
   
• SFTR reporting of trades for which settlement fails, which will see amendments to SFTR Level 3 to exclude securities financing transactions from reporting obligations where the opening leg settlement fails prior to the T+1 reporting deadline, on the basis that no actual economic exposure is created.

ESMA has decided not to put forward several other proposals the its Call for Evidence. These include:

• Removal of SFTs with central banks from MiFIR transaction reporting (dependent on the full integrated framework) as ESMA considered that relevant information would need to be captured under SFTR instead, which would lead to implementation costs before the full “report once” framework is in place, which would partially offset the benefits.
   
• Harmonisation of definitions / fields and reprioritisation / removal of reporting fields across regimes. These would require chnages to reporting schema, instructions and data models and will therefore be picked up as part of the  Level 2 design for the new “report once” framework).
   
• Removal of FX derivatives from MiFIR transaction reporting, as this would  cause temporary data gaps and risk duplication of implementation effort. 

Timing and next steps

To put in place the “report once” integrated transaction reporting model, ESMA has estimated that, in an “optimistic scenario”, Level 1 legislative changes could be in place by mid-2028. This would be followed by ESMA developing integrated Level 2 templates (targeted by mid-2029) and IT development and deployment (targeted by mid-2030). ESMA then suggests a 12 to 18-month implementation period for market participants, meaning that the new integrated transaction reporting model could be operational by the second half of 2031 (at the earliest).

Following publication of the Final Report, ESMA will engage with EU institutions on the proposed recommendations. Implementation will require targeted legislative changes, a phased approach, and inclusive dialogue with industry technical experts, covering reporting templates, data standards and streamlined infrastructure.

The intermediate measures will proceed in parallel on their own timelines, with Level 3 changes implementable in the short term. ESMA suggests that Level 2 changes and Level 3 changes that require greater coordination would be achieved over the medium term. Those intermediate changes which themselves require Level 1 changes will be subject to the lengthier legislative process.

It is worth noting that Level 1 changes to the MiFIR transaction reporting requirements which were made in March 2024 following the EU MiFIR review rely on certain changes to RTS 22 which have been delayed due to the current comprehensive review of EU transaction reporting regimes (although under ESMA’s proposals above, some of the MiFIR review changes, such as deletion of the short sale flag, will be achieved through deprioritising supervision). Firms will need to keep a close eye on the detail and implementation timing of any changes arising from the current ESMA proposals, given the complex interaction with previous Level 1 changes. 

Documents 

You can access ESMA’s final report here. ESMA’s press release is here. A useful fact sheet is here.

Our earlier client note on ESMA’s call for evidence is here (which includes feedback on ESMA’s earlier consultations on changes to MiFIR RTS 22 and 23 following the EU MiFIR Review). Our blog post on ESMA’s interim report is here.

Our client note on the FCA’s proposals for reforms to the UK transaction reporting framework is here, with an FCA policy statement due in the second half of 2026.