The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published its final report on the “simplification” of transaction reporting, setting out a clear path towards a “Report Once” approach.
ESMA said its review confirms that the main drivers of cost and complexity include frequent and unsynchronised regulatory changes, duplication of reporting across frameworks and channels, and dual-sided reporting and associated reconciliation processes.
In response, ESMA recommends a staged approach combining short-term burden reduction with a long-term structural reform.
“At the core of this strategy is the development of a single integrated transaction reporting framework across MiFIR, EMIR and SFTR, based on a ‘report once’ principle,” said ESMA.
“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 that then can be reused across authorities and supervisory mandates, reducing duplication while preserving the information needed for effective supervision. “
ESMA chair Verena Ross said: “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.
“Today, ESMA is taking a decisive step to simplify this system.
“Our analysis shows that a ‘report once’ approach can significantly reduce costs while improving the quality and usability of data for supervisors. With the implementation of this approach we support more integrated, efficient and resilient EU capital markets”.
The report is supported by a comprehensive cost-benefit analysis (CBA), including a study involving market participants.
The analysis indicates that the proposed “report once” scenario could deliver annual net savings of €250 million to €1 billion, a reduction in recurring costs of around 22%–24%, and 10-year discounted cumulative net benefits of €1.2 billion to €4.9 billion.
Implementation costs are expected to be recovered within three to four years, after which efficiency gains would materialise on a sustained basis.