EU transaction reporting on the brink of change: what the new ESMA interim report means in practice

The European regulatory landscape for post-trade reporting is on the brink of its biggest reform in years. On 4 May 2026, the European Securities and Markets Authority (ESMA) published its long-awaited interim report on the Call for Evidence (CfE) regarding the simplification of financial transaction reporting. This report is not final; it is an interim update. The decisive final report will follow in summer 2026.

Anyone working in compliance, regulation or reporting should start preparing now.

The current situation: Why action is needed

For years, market participants have been complaining about the increasing complexity of regulatory reporting in the EU. Whilst MiFIR, EMIR and SFTR serve different supervisory purposes, they overlap considerably in terms of content, terminology and processes. The result is a costly parallel world of duplicate IT systems, conflicting data requirements and inefficient workflows.

108 stakeholders, ranging from banks and asset managers to energy companies and supervisory authorities, have responded to ESMA’s Call for Evidence. The message is clear: the current system is no longer sustainable. The most common points of criticism are:

• Duplicate reporting requirements: The same transaction is reported multiple times under different regimes, often with slightly different fields and formats.
• Dual-sided reporting: Under EMIR and SFTR, both counterparties to a transaction must report independently of one another. This leads to mismatches, time-consuming reconciliation processes and disproportionate costs, particularly for smaller market participants.
• Fragmented infrastructure: Firms maintain parallel systems for EMIR, MiFIR and SFTR, with different validation rules, portals and points of contact at NCAs.
• Constant changes to regulations: Unsynchronised updates from the various authorities necessitate ongoing IT adjustments with insufficient lead times.

What the interim report actually says

Two scenarios remain in the running; two are out

ESMA had originally put forward four simplification scenarios for discussion. The outcome of the consultation is clear: Scenario 1b (event-based delineation) and Scenario 2b (extended ‘Report Once’ including REMIT and Solvency II) will not be pursued further. Both received little support and were deemed by the market to be too complex, too costly and insufficiently effective.

The focus remains on:

Scenario 1a – Delineation by instrument type

OTC derivatives are reported under EMIR, whilst exchange-traded derivatives (ETDs) are reported exclusively under MiFIR. ESMA has since broken this scenario down into three sub-categories:

• with and without schema changes
• with and without partial ETD/OTC separation.

What they all have in common is the expansion of delegation options and the removal of reconciliation requirements on the TR side. Implementation period: up to 5 years. Stakeholders view this as a pragmatic first step with manageable costs.

Scenario 2a – the ‘report once’ principle

The more ambitious long-term goal: a single report that simultaneously meets the requirements of MiFIR, EMIR and SFTR. This model would eliminate duplication at source and also fundamentally change the reporting channel structure. Implementation timeframe: 5–7 years. Stakeholders welcome the vision, but make their support conditional on clear governance, a phased rollout and a robust cost-benefit analysis.

The preferred approach: Initially, Scenario 1a as a transitional step, followed by a gradual transition to Scenario 2a.

The dual reporting issue is coming to the fore

In every respect, this is the crux of the matter for many: the review of the two-sided reporting system. Reconciliation costs, the time-consuming process of matching data, and the resolution of discrepancies between the reports submitted by both counterparties are identified as the primary cost drivers within the entire reporting system.

As part of the ongoing cost-benefit analysis, ESMA will specifically assess how an expansion of delegation options and the removal of reconciliation obligations at the TR level can be implemented — whilst maintaining data quality and supervisory oversight.

Centralisation of reporting channels as a prerequisite

Around 76% of respondents are in favour of greater centralisation of the reporting channel structure. The current architecture, with parallel channels via TRs, ARMs, APAs and NCA-specific portals, is perceived as inefficient.

A shift of reporting obligations to CCPs, particularly for cleared ETD trades, is welcomed by the majority. However, ESMA will not include the far more controversial question of whether trading venues should be more closely involved in the reporting obligation in its final recommendations.

Four revised guiding principles

Based on the feedback, ESMA’s guiding principles for simplification have been refined:

1. Preserving the informational value: Not every data field needs to be retained, but the regulatory informational value must be preserved.
2. Reduce overlaps: actively eliminate overlaps between schemes.
3. Pursue global alignment: Aim for international harmonisation, but remain realistic.
4. Balance costs and benefits: Give equal weight to short-term and long-term cost-benefit considerations.

What won’t change for the time being

Despite the pressure for reform, there are clear indications of what is not up for debate in the short term:

The daily T+1 reporting requirement remains in place. The overwhelming majority of stakeholders regard it as indispensable for effective market supervision and crisis management. Potential for simplification lies in field content and processes, not in the reporting frequency.

Nor will new technologies such as DLT or smart contracts play a role in the short term. ESMA considers these technologies not yet mature enough for mandatory use in regulatory reporting and will instead rely on proven SupTech approaches and standardisation.

Short-term relief on the way

Regardless of the final outcome, ESMA has identified a number of measures that are to be proposed in the Final Report as recommendations for medium-term Level 1 amendments:

• Reduction of the back-reporting period from 5 to 3 years
• Exclusion of SFTs with central banks from the scope of MiFIR and transfer to SFTR
• Simplification of intragroup reporting under EMIR
• Exclusion of certain corporate actions from the scope of MiFIR
• Clarification of the ETD reporting scope
• Revision of the SFTR reporting obligation for settlement failures

These changes require legislative action by the European Parliament and the Council and will therefore take effect in the medium term at the earliest.

What this means for your business

The Interim Report is an important interim indicator, but it does not yet represent a final decision. The direction is clear; the details will be finalised in the summer. Now is the right time to make internal preparations:

Review the current reporting architecture: Where are there currently overlaps between EMIR, MiFIR and SFTR? Which systems and processes would be affected by a delineation by instrument type (Scenario 1a)?

Ensure cost transparency in dual reporting: ESMA has identified reconciliation costs as a key burden. Firms that have not yet isolated these costs internally should do so now, both to be able to contextualise the upcoming CBA results.

Prepare governance and change management: Both remaining scenarios require significant IT adjustments. Scenario 2a, with a 5–7-year horizon, is no longer a distant project; it is a concrete strategic planning horizon.

The next major step: Final Report in summer 2026

The ESMA Final Report is due to be published by July 2026 and submitted to the European Commission.

It will contain specific recommendations for legislative amendments at Level 1, as well as a comprehensive, independent cost-benefit analysis covering 30 companies across four sectors. On this basis, the European Commission is expected to develop legislative proposals to amend MiFIR, EMIR and SFTR.

Our recommendation: Keep a close eye on the publication. The Final Report will set out the specific directions that are still open today, particularly regarding the precise design of the dual reporting reform and the reporting channel structure.

Those who address the implications of the ESMA proposals at an early stage will be able not only to implement regulatory changes reactively, but also to use them actively to optimise processes and systems. BE supports financial institutions in analysing existing reporting landscapes, identifying regulatory and operational gaps, and deriving robust target scenarios, backed by the practical experience of TecconTR in regulatory reporting.