The European Securities and Markets Authority (ESMA) has issued a call for evidence to gather feedback on opportunities to integrate, streamline, and simplify, with a view to reduce the burden associated with complying with, financial regulatory reporting requirements. It hopes to identify major cost drivers stemming from regulatory reporting and how to best improve the overall framework. Interested parties have until 19 September to submit responses.

The call for evidence focuses on transaction reporting, noting it is one of the costliest areas in the financial sector. It cites an industry study finding MiFIR, EMIR and SFTR reporting, taken together, is costing the industry in the range of EUR1-4bn per year. That same study found that mean one-off costs of EU financial legislation for Investment Banks in particular (~ EUR151 million), was 7-9x times higher than costs for Insurers and Asset Managers. Feedback from market participants gathered by ESMA showed that the most significant burden stems from siloed approaches to regulatory frameworks.

Celent research shows that sell side firms have recognized that their regulatory reporting systems need investment. Our annual survey of sell side financial institutions found that Regulatory Reporting systems ranked in the top three of systems expected to experience replacement or major change in 2025/26. Additionally, 40% of sell side respondents ranked “meeting compliance and regulatory requirements” as a top three strategic driver of IT investment.

The ESMA call for evidence focuses on financial transaction reporting across there key reporting frameworks: Markets in Financial Instruments Regulation (MiFIR), for transactions in financial instruments, European Market Infrastructure Regulation (EMIR) for derivatives transactions and Securities Financing Transactions Regulation (SFTR). Once it has analysed the responses to its call for evidence, ESMA expects to publish a final report at the beginning of 2026 defining a preferred simplification option.

The paper outlines how scope expansion of EMIR from OTC derivatives to including exchange-traded derivative created overlaps with MiFID 1. Then how MiFID II and MiFIR increased the overlap by imposing more reporting requirements for OTC transactions to National Competent Authorities (NCAs). Then further developments such as EMRI Refit further broadened the scope of OTC derivatives subject to transaction reporting, exacerbating the duplication of reporting obligations between EMIR and MIFIR. Parallel regulation such as SFTR added additional complications.

ESMA has identified the main challenges associated with overlapping or inconsistent requirements across major transaction reporting frameworks as highlighted by stakeholders:

• Frequent regulatory changes and lack of flexibility to enable a phased implementation, synchronisation and coordination of the changes in the different regulatory regimes
• Duplicative reporting of the same derivative instruments under MiFIR, EMIR and REMIT
• Different terminology and definitions within the differing reporting regimes
• Requirements to report both transaction-level and position-level data under EMIR, SFTR, and MIFIR commodities position reporting
• Dual-sided reporting obligations under EMIR and SFTR
• Intergroup derivative reporting
• Reference data reporting duplications
• Different reporting channels across MiFIR, EMIR, SFTR, and REMIT
• Duplication of IT systems and processes

For more background on trends in transaction reporting and profiles of leading transaction reporting solutions, Celent subscribers should access “Turning the Tide: Transaction Reporting Vendor Landscape”.

For more information on IT spending drivers and priorities, Celent subscribers should access “Dimensions: Capital Markets IT Pressures & Priorities - Sell Side Edition 2025”