The European Securities and Markets Authority (ESMA) has
issued a call for evidence to simplify financial transaction reporting. The
consultation is part of an EU effort to reduce regulatory burdens. It focuses
on overlaps across reporting regimes such as MiFIR, EMIR, and SFTR.
Forex Brokers Face Costly Reporting Overlaps
Forex brokers dealing in derivatives like FX swaps,
forwards, and contracts for difference (CFDs) are among the entities affected.
Under current rules, a single transaction may need to be reported under
multiple regimes. MiFIR requires reporting for transparency purposes, while
EMIR focuses on risk monitoring. This leads to duplicated efforts and higher
costs.
📞 #ESMA invites stakeholders to share their feedback on opportunities to simplify, better integrate, and streamline supervisory reporting → Deadline: 19 September 2025 pic.twitter.com/NuNgCYch0t
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) June 23, 2025
ESMA estimates that about one-third of all EMIR-reported
transactions are also covered by MiFIR. The combined reporting cost to the
industry is estimated at between €1 billion and €4 billion per year. Smaller
brokers face particular challenges, as compliance efforts may outweigh their
business scale.
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Two Options Proposed for Simplification
The paper outlines two main approaches for simplification.
Option 1 proposes removing overlaps by separating reporting
either based on the type of instrument—where exchange-traded derivatives would
be reported under MiFIR and over-the-counter trades under EMIR—or by the type
of event, with transactions reported under MiFIR and post-trade events such as
margin updates reported under EMIR.
Option 2 introduces a “report once” framework. Under this
approach, firms would submit data through a unified template. This would cover
requirements across MiFIR, EMIR, and SFTR. Both options include a possible
removal of dual-sided reporting, where both counterparties report the same
trade.
ESMA Seeks Feedback on Reporting Simplification
ESMA is collecting feedback from market participants.
Brokers are encouraged to share cost estimates and views on simplification.
Specific questions in the paper address cost burdens, proportionality measures
for smaller firms, and transition challenges.
Feedback is open until 19 September 2025. A final report is
expected in early 2026. ESMA says the findings will inform future regulatory
changes.
This article was written by Tareq Sikder at www.financemagnates.com.
