This is a guest post by Eric Odotei, Finalto Group Head of Regulatory Reporting
Europe’s financial regulators have just shaken up the transaction reporting landscape by hitting the pause button on MiFID III’s reporting overhaul. The European Securities and Markets Authority (ESMA) has launched a public call for evidence aimed at simplifying and improving the efficiency of supervisory reporting across EU financial markets. This is part of ESMA’s wider Data Strategy and its continuing efforts to reduce complexity, reduce costs, and make life easier for firms, without sacrificing transparency or oversight.
The announcement follows long-standing concerns that current reporting frameworks, developed in the aftermath of the 2008 financial crisis, has become overly complex and costly for certain firms. The industry has struggled with overlapping obligations, duplicated data submissions for multiple regimes and frequent, uncoordinated rule changes. ESMA has acknowledged that the current arrangements across MiFIR, EMIR and SFTR have created significant inefficiencies and financial burden, with a 2019 study estimating that the combined cost of reporting under these regimes falls between €1 billion and €4 billion annually.
ESMA Chair Verena Ross emphasised the regulator’s objective, stating, “The goal is to reduce complexity and costs for stakeholders while enhancing data quality, sharing and usability.”
To address these challenges, ESMA has asked stakeholders to provide feedback on two options.
- Eliminating overlaps in reporting obligations while retaining the existing reporting channels; or
- Introducing a unified reporting template based on the “report once” principle, which would consolidate multiple regimes into a single submission.
Industry experts believe this consultation signals a strategic pause rather than a simple delay. Speaking on the latest episode of RegCast, PJ Di Giammarino, CEO of RegRisk Legal Solutions, described the implications for firms: “You have been told to build. Now you have been told to freeze, but get ready to move soon. If you misread this moment, you will pay twice.”
ESMA has also confirmed that, during this consultation period, it will not move forward with proposed changes to key technical standards currently under review within the MiFIR framework, specifically RTS 22 on transaction reporting, RTS 23 on reference data, and RTS 24 on order book data. This decision is intended to relieve immediate implementation pressures and avoid unnecessary cost, allowing firms to focus on strategic planning rather than piecemeal adjustments.
The potential benefits of the “report once” model have attracted particular interest. Under this principle, firms would submit one harmonised report covering all relevant obligations rather than filing multiple reports across different regulations. However, such an approach would require substantial investment in technology, harmonisation of data standards and close cooperation between regulators and industry. Dawd Haque, Chair of the Bank of England and FCA’s Data Standards Committee, stated on the RegCast podcast that “We expect the proposed changes in RTS 22 and RTS 23 will be reviewed in light of feedback, significantly amended and reduced, with a compliance date in late 2026.”
No scope for complacency
While some firms view the pause as a temporary reprieve, experts caution against complacency. “Delays rarely materialise and never reduce the cost of catching up,” observed Grant Haley of First Derivative. “Many firms assumed this would buy them time, but the reality is that the expectations for data quality and governance are only increasing.” Indeed, data quality is emerging as the central issue. Poor reporting is no longer treated as a minor technical breach but as a key risk indicator. Under the ECB’s Supervisory Review and Evaluation Process (SREP), deficiencies in data can lead to additional capital requirements. PJ Di Giammarino warned, “This reset is about more than updating policies. It is about ensuring credible compliance before gaps turn into capital or reputational risks.”
ESMA has already consulted key industry bodies, including the Retail Derivatives Forum (RDF), and is inviting all stakeholders to submit responses to the call for evidence by 19 September 2025. The regulator has also confirmed that it will hold further discussions to assess the practical challenges of each proposed approach and examine the underlying cost drivers of supervisory reporting. A final report is expected in early 2026, consolidating feedback and setting out ESMA’s recommended path forward. For firms, this is more than an exercise in cost reduction. It is a rare opportunity to shape the regulatory architecture that will define reporting for the next decade, replacing fragmented processes with a streamlined and resilient model. As PJ Di Giammarino observed, “This is not just a reset. It is a rethink. Stop patching and start building for the future.”
All opinions, news, research, analysis, prices or other information is provided as general market commentary and not as investment advice and all potential results discussed are not guaranteed to be achieved. The information may have been derived from publicly available sources, company reports, personal research, or surveys. Past performance is not indicative of future performance. Trading carries risk of capital loss. Service available to professional clients only.
