Associations Respond to ESMA Consultation on Simplifying Transaction Reporting

Each of the industry associations were asked as part of Question 1 what the key challenges were with respect to the current reporting regime landscape. Many known industry challenges were re-highlighted including:

• High implementation/upgrade costs. Constant rule changes force repeated, large IT and control overhauls.
• Resource-intensive change management. Continuous updates tie up compliance, legal, and IT teams, diverting capacity from other strategic, high-value work.
• Higher non-compliance risk. Rapid, uncoordinated changes increase reporting errors and delays, driving fines, remediation, and operational disruption.
• Backloading burden. EMIR backloading showed the "pain" of limited historic data, legacy systems, manual rebuilds, and complex reconciliations.
• Dual-sided reporting obligation under EMIR. Each firm must allocate significant resources to monitor, reconcile, and resolve mismatches with counterparties. This is particularly true for non-standard commodity derivative transactions (such as financially settled PPAs) and requires dedicated teams, extended back-office support, and potentially costly manual intervention.

Energy Traders Europe commented specifically on dual-sided reporting and the disadvantages the EU has compared to the US and Singapore who both have single sided reporting:

Additionally, this practice is in contrast with other jurisdictions like the U.S. (CFTC) or Singapore which have already moved to single-sided or delegated reporting, allowing firms to streamline processes and reduce cost. The EU’s insistence on dual-sided reporting or remaining responsibilities for non-reporting counterparties for reporting quality standards puts firms at a competitive disadvantage, especially in a moment where competitiveness ranks high in the EU agenda. [page 3]

In addition, Europex on page 2 of its response specifically called out the overlapping reporting requirements for EU gas and power derivatives under the order, transaction, and position reporting frameworks across EMIR, MiFID/R, MAR and REMIT which results in the redundant submission of the same activities.

Overall, European gas and power derivatives are reported up to five times across different reporting arrangements, each with varying formats imposing a disproportionate and unnecessary burden on the industry. This goes beyond the financial transaction reporting as examined within the current Call for Evidence. Given that transactions in European gas and power derivatives are reported five times across different reporting arrangements, each with varying formats, Europex notes that this also complicates the EU supervisors' ability to effectively analyze data collected through these disparate channels.

In response to these current challenges, four themes emerged which most of the associations recommended ESMA review and action.

[1] ESMA Option 1a preferred: Remove reporting duplication between EMIR and MiFIR / Non-Investment Firms Only Responsible for Reporting Bi-Lateral Transactions between one another

Four of the five industry association responses either explicitly prefer or are consistent with ESMA’s Option 1a solution presented in its consultation which proposes to remove duplication within the EMIR and MiFIR financial regimes via a clear, instrument-based delineation. CEER does not explicitly align with Option 1a but it does comment on Option 2 (single reporting regime) noting the complexities, cost burdens, and overall implementation challenges should this approach be taken forward.

Specifically, Option 1a proposes to remove exchange traded derivatives (ETDs) from EMIR Article 9 scope and Over The Counter (OTC) derivatives from MiFIR Article 26 so each transaction is reported once under the appropriate regime. ETDs would be reported once under MiFIR and OTC derivatives would be reported once under EMIR.

While each industry association response acknowledged that there could be synergies and potential long term benefits from Option 2a and 2b (report once framework), they each caution that this will ultimately add additional cost and complexity if existing EMIR and SFTR templates were to be incorporated into the MiFIR template and thus stress that Option 1a could lead to a similar end state as Option 2a and 2b without additional complexity and cost.

Option 2a and 2b would be a significant cost to non-financial counterparties (NFCs), a common status amongst many energy and commodity firms, as NFCs do not currently submit MiFIR transaction reports and they would need to implement the expanded MiFIR template. Consequently, the responses strongly suggest that should ESMA decide to move forward with Option 2a, there should be significant changes to the approach and, as a minimum, NFCs should be excluded from the scope of the new reporting regime and maintain the status quo for them.

The Associations comment in their response on benefits of Option 1a versus 2a and 2b as follows:

Were it to transpire that all EMIR specific fields are added to MiFIR (and vice versa), there would arguably be: (i) no burden reduction for market participants, (ii) no guarantee that the quality of data provided is improved, and (iii) would hinder the potential to use Option 1a as a step towards achieving an Option 2 end state (as the cost to implement a superset of fields to both EMIR and MiFIR would negate any future cost savings that could be achieved under Options 2). [page 7]

Compared to Option 2a, where the goal of “report once” would also require extensive changes in the structure and substance of MiFIR reports as well as the relevant reporting systems, Option 1a could achieve a similar outcome over a shorter time period and with considerably less costs for reporting firms. This is because Option 2a, as proposed in the CfE, and without any reduction to the number of reportable datapoints, would essentially be a larger single “superset” reporting template based on an amalgamation of reporting fields across the three reporting regimes. Were this the case, it would actually lead to additional burdens for firms as many of these fields would not always be relevant for certain transactions or products. While we do not rule out a target end state akin to Option 2a, there should be a careful comparison and assessment of the additional benefits Option 2a achieves to determine to what extent it goes above and beyond what can be achieved via a carefully implemented modified Option 1a. [page 10]

Should ESMA decide to move forward with Option 2a, we argue that there should be significant changes to the approach and as a minimum NFCs should be excluded from the scope of the new reporting regime and maintain the status quo for them. [page13]

Finally, we reiterate our belief that Option 2a does not appropriately consider the principle of “preserving information scope” but instead could lead to scope creep. Currently, each distinct reporting framework serves different regulatory purposes (e.g. MiFIR: market abuse surveillance; EMIR: systemic risk mitigation) and fields are supposed to be appropriately calibrated to reflect the unique scope of each regime. However, the amalgamation of many different regimes to establish a single set of rules risks creating imbalances/inconsistencies due to multiple/different regulatory goals being commingled. [page 14]

In addition, Energy Traders Europe on behalf of NFCs question how bilateral contracts would be reported under Option 2a.

Non-Financial Counterparties below the clearing threshold pose limited financial risk. We remain uncertain about the impact of Option 2a on bilateral contracts between such counterparties. In particular, it is unclear whether Option 2a takes this into account and ensures that only market participants and contracts already in scope of MiFIR reporting would be captured, given that the proposed reporting channels under Option 2a are limited to Financial Counterparties and CCPs. [page 10]

Specific additional observations across industry association responses in support of Option 1a include:

[a] The Associations:

• Propose Single-sided reporting submissions to cut reconciliation costs and achieve greater global alignment:
  • All entities would benefit due to the removal of the need to exchange a Unique Transaction Identifier (UTI), removal of pairing and matching requirements (consistently identified as a significant part of reporting costs), and fewer submissions of reports to Trade Repositories (TR).
  • There will be also fewer voluntary delegated reporting arrangements required, which will benefit sell-side firms.

The Associations believe that Option 1a (Delineation by instrument) will be the most effective and cost-efficient way to eliminate duplication and streamline reporting for two key reasons:

• A clear delineation of reportable instruments between MiFIR and EMIR can ensure that a single transaction in a specific type of instrument will only be reported once. Firms currently face duplicative reporting obligations for the same derivative instruments under MiFIR, EMIR, and REMIT. In our response, we call for each transaction to be reported under a single regime only, supporting the removal of Exchange Traded Derivatives (ETDs) from EMIR and Over The Counter (OTC) derivatives from MiFIR.
• The introduction of single-sided reporting under a clear logic to identify the report submitting entity. The dual-sided reporting model under EMIR and SFTR is identified as a major cost driver. The Associations advocate for a shift to single-sided reporting, which would reduce the number of reports, simplify processes, and align with global standards. [page 2]

• Proposed Intragroup Derivative Reporting exemptions:
  • Intragroup derivative reporting in the EU imposes disproportionate operational burden on multi-jurisdictional groups.
  • The EMIR Article 9 exemption requires separate National Competent Authority (NCA) notifications across countries and lacks a streamlined, central submission route via trade repositories.
  • By contrast, the US framework, through CFTC No-Action Letter 13-09 and annual centralized filings for end-user and inter-affiliate exemptions, effectively relieves most inter-affiliate reporting and simplifies compliance.
  • Additional pressure arises under MiFIR, where RTS 22 Articles 2 and 4 create further obligations for intragroup transactions and arrangements.
  • To reduce cost and complexity without weakening supervisory oversight, the Associations advocate either (i) targeted exemptions for intragroup activity, or (ii) a centralized, repository-based notification mechanism that mirrors the CFTC’s efficient filing model.
• Proposal to Simplify Back Reporting:
  • Simplify back reporting requirements by providing firms the option to limit back reporting to (i) only material economic changes, and (ii) only reporting the corrected data point / fields rather than resubmitting an entire report.

[b] Eurelectric:

• Aligns with Option 1a but warns against shifting obligations onto non-investment firms and urges explicit reporting assignment by reporting counterparty, e.g. ETD by venues/CCPs/clearing banks, OTC by investment firms, and bilateral contracts by non-investment firms.
• Stresses reporting responsibility allocation must reduce burden and ensure minimal additional new reporting requirements for non-investment firms.

The reporting responsibilities assigned to the various parties should be always clear, ideally based on the principle that ETD-reporting responsibilities sit with trading venues/CCPs/clearing banks and OTC-reporting responsibilities sit with investment firms. Wherefore noninvestment firms would only be responsible for bilateral transactions with another one (possibly in a well-defined one-sided manner). [page 3]

[c] Europex:

• Europex favours Option 1a to remove duplication by instrument and supports single-sided reporting, sourcing data from the party best placed to provide it e.g. “primary-source principle” where entities owning the information should report it. It also cautions moving ETD reporting to trading venues as it would bring additional administrative burden especially in those cases where they do not directly have access to the required information.

[d] Energy Traders Europe:

• Energy Traders Europe is cautiously supportive of Option 1a (remove duplication by instrument) provided NFCs are not pulled into MiFIR Article 26 and reporting responsibilities remain clear, e.g. keep NFC reporting via TRs where applicable.
• It warns against expanding EMIR to include market-abuse fields attributable to MiFIR/MAR requirements and also against mandatory external audits as a replacement for dual-sided reconciliation.
• Energy Traders Europe prefers single-sided reporting with a transparent reporting responsibility hierarchy, such as assigning reporting duty to the counterparty with the higher EMIR classification e.g. Financial Counterparties (FC) greater than NFC+, or in cases of equal status to default to the seller. It also supports venue-led reporting for on-venue trades but rejects hybrid models that require market participants to enrich venue submissions.

[2] Enable secure data sharing among authorities to reduce duplicative reporting submissions

Many of the industry associations agreed that competent authorities should implement secure, need-to-know data sharing to reduce redundant submissions and to assemble a more complete, timely supervisory picture.

Multiple respondents propose a secure, central access model.

• Europex suggest a central, secure access point with need-to-know gating and stresses that regulators should first share and use the data they already receive rather than mandate new submissions.
• Energy Traders Europe calls for a central collection mechanism or interoperable framework with cross-border access e.g. allowing ESMA, ACER, NCAs, and National Regulatory Authorities (NRAs) to access data more effectively from a single, secure access point while leveraging existing technical solutions and avoiding speculative rebuilds. It draws on existing regional cooperation models, such as MIBEL coordination between Spain and Portugal (Mercado Ibérico de Electricidad) and Nordic regulator’s cooperation, which demonstrate that effective cross-border coordination does not require reporting centralisation.
• CEER supports improved data sharing but cautions against intermingling REMIT with financial data before REMIT 2 stabilises. It also proposes reforming the “double reporting exemption” so comprehensive REMIT submissions could, where appropriate, satisfy overlapping financial reporting needs.
• Eurelectric welcomes centralisation only within financial frameworks (MiFIR/EMIR/SFTR) and warns that dragging REMIT into a financial hub could erode sector-specific surveillance and complicate reporting responsibilities.

[3] Do not include other regulations (REMIT 2 / MiFID) into reporting consolidation initiative until consolidated reporting implemented across MiFIR/EMIR and REMIT 2 implementation stabilizes

All responses were cautious about initially mixing financial regulations such as EMIR and MiFIR with energy specific regulations e.g. REMIT 2.

• The Associations were quick to note that regulations such as REMIT 2 are unique and have substantially different reporting requirements which would only add to implementation complexity and costs should regulators move to a single reporting initiative. They recommend focusing on MiFIR, EMIR, and SFTR for a quicker implementation.
• CEER’s position starts by streamlining transaction reporting across financial regimes first e.g. MiFIR/EMIR/SFTR before any cross-sector steps are taken e.g. inclusion of REMIT. It states that REMIT 2 already enacted an extensive regulatory upgrade for energy markets and layering cross-sector consolidation while REMIT 2 is being rolled out risks instability and degraded surveillance.

As a result, associations noted that any consideration of the inclusion of additional regulations such as REMIT or MiFID should only occur after reporting consolidation across EMIR and MiFIR stabilises (under Option 1a) and only after the REMIT 2 programme has been fully implemented and evaluated.

That said, the industry associations were still adamant that REMIT should not be included in this initial streamlining exercise.

• Eurelectric in its response to ESMA’s Question 2. notes:

Reporting frameworks with very sector-specific features, such as REMIT, should not be included as they (i) can be hardly combined with other streams and (ii) do not currently exhibit reporting overlaps with other regulations. [page 5]

It further stresses the point about the exclusion of REMIT II in its response to Question 13. as follows:

Furthermore, financial markets and wholesale energy markets have their own specificities, as demonstrated by the fact that they have separate sectorial regulations under their respective sectorial regulators. Where therefore see risks in aggregating information of a very broad and differentiated nature. This would result in excessively wide and confusing reporting content, especially as REMIT requires six different tables about the various types of wholesale energy products (which cover not only gas and power commodities, but also the related capacity and storage contracts). [page 8]

• Energy Traders Europe was equally direct stating unequivocally not to include REMIT in any revised transaction reporting regime (see page 8 of its response).

Option 1a may affect REMIT, even only indirectly, through the existing double-reporting prohibition with EMIR and MiFIR, ensuring that transactions already reported under EMIR are not reported again under REMIT. We believe REMIT should remain out of scope of the Option 1a delineation principle, given its different terminology, reporting rules, and regulatory objectives. [page 8]

[4] Clarify Reporting Responsibilities, Rationalize Field Scope, and Reporting Frequency

Industry fatigue with constantly changing reporting templates and proliferating fields is a recurring theme across all of the responses.

Field Scope:

• Eurelectric calls for robust design and stability, noting that frequent changes are the main cost driver:
  • Should Option 2a be selected (Report once principle: MiFIR, SFTR and EMIR), it urges regulators to leverage the 2024 EMIR upgrade (including 204 fields, ISO 20022 XML standard adoption, and Unique Product Identifier [UPI] as new mandatory derivative identifier) rather than rebuild reporting pipelines.
  • It is against Option 2a in principal as it would lead to potential modifications to the existing reporting obligations and infrastructures for non-investment firms, which could lead to a disproportionate implementation strain on smaller firms.
• Europex similarly cautions against field expansion that blurs regime purposes. Instead, it proposes to align fields strictly to supervisory aims and to reduce operational complexity in formats, validations, and connectivity.
• Energy Traders Europe stresses the need for a thorough cost-benefit assessment and a coordinated data strategy, reflecting both the recent investment efforts by market participants and the capacity of authorities to process and use the incoming data effectively. It states that this requires:
  • A pause on changes to existing regime requirements, including REMIT. As regards proportionality and the aims of simplification and burden reduction, Energy Traders Europe noted that the current consultation on the REMIT Implementing Act covering amendments to the transaction reporting regime includes proposals which, if taken forward, would significantly increase the complexity and administrative burden on REMIT market participants, especially with regards to exposure reporting (where it believes the proposals go far beyond the Level 1 text).
  • A systematic review to identify where regulatory authorities lack access to specific datasets and whether this hinders effective market oversight. Any proposed increase to data fields in the future should be subject to a specific justification required and cost-benefit exercise – with the intention of discouraging unnecessary scope-creep;
  • Post-trade data sourced when ETD’s cleared through non-EU CCPs (particularly those not recognised under EMIR). Energy Traders Europe stressed that ESMA will need to provide clarification on how this data will be sourced given ESMA has no direct supervisory power over third-country CCPs.
• The Associations highlight field rationalisation as a core theme and recommend that ESMA identifies not only how data is collected, but also (and most importantly) why and whether it needs to be collected.
  • It proposes that ESMA conducts a thorough assessment of the data which is required with the aim to limit the reportable fields to only those that are necessary for regulators to perform the supervisory functions associated with each reporting regime.

Reporting Responsibilities

• Europex supports the “primary-source principle,” advocating that the entity with the fullest, most accurate view submits, with others granted access via regulatory sharing.
• Eurelectric proposes a reduced reporting obligation for non-investment firms. Specifically, ETD reporting is assigned to trading venues/CCPs/clearing banks, OTC reporting by investment firms, and non-investment firms reporting only for bilateral trades with one another.
• Energy Traders Europe stressed that ESMA must assess the potential implications for NFCs currently falling outside of the MiFIR reporting framework on page 9 of its response.

Before any final decision is made, we believe it is essential to carefully assess the potential implications for non-financial counterparties currently outside the MiFIR reporting framework, including:

• Confirmation the reporting scope for non-financial counterparties would not be extended to MiFIR reporting.
• Clarification is needed on the delineation and determination of reporting scope – particularly for non-financial counterparties trading on third-country venues and involving third-country CCPs or direct clearing members. It should be confirmed that this does not alter the existing responsibility for reporting, nor result in different technical standards for non-financial entities under Option 1a.
• Confirmation that Option 1a does not lead to change of the recipient of the reported data, in particular data submission to trade repositories for non-financial counterparties would remain in place.
• Treatment of market abuse surveillance data: As already mentioned, expanding EMIR’s reporting template to include these fields could increase complexity and burdens on market participants, undermining the goal of reducing reporting costs and expanding the scope of EMIR itself. A missing element is a proportionate mechanism for regulatory access to market abuse data, such as allowing ad hoc requests when justified, rather than embedding these requirements into existing EMIR reporting.
• Transition and phase-out mechanisms: Option 1a does not explicitly outline a phased implementation path, which is critical given the recent revisions to EMIR and the complexity of changing reporting structures. Without well-defined transition periods, market participants may face regulatory fatigue, costly system changes, and operational risks. Defining phase-out and adaptation timelines would help minimize disruption and ensure smoother compliance.
• Clarification on dual-sided reporting and audit requirements: While Option 1a proposes removing dual-sided reporting, it also mentions the possible mandatory external audit. We do not support such proposal since it would limit the benefit of the Option itself and add unnecessary costs and complexity. For energy trading firms it is essential to ensure that, when reporting details of OTC derivative contracts concluded with a non-financial counterparty below the clearing threshold (NFC-), the obligation for single-sided reporting by financial counterparties is maintained.

Frequency

• Eurelectric questions the supervisory value of next-day reporting in all cases and proposes reviewing daily timelines to allow better validation and reconciliation.

We would welcome an elimination of daily reporting, as it would give companies more time to report. This burden reduction would be especially justified in the recognition that it may not be essential for the regulator to receive the information as early as the next day. [page 12]

• Europex, by contrast, prioritises field rationalisation over frequency tweaks, arguing that cutting low-value fields yields larger benefits.
• The Associations note that T+1 reporting is generally considered sufficient and the current reporting frequency requirement does not need to be changed.
  • An alternative proposal has been suggested for: (i) the reduction of the reporting frequency in relation to specific data (e.g. valuation and collateral once a week), and (ii) the increase of the delay of reporting from T+1 to T+2.
  • Rationale of the proposal: (i) it would be useful to assess the reduction of the frequency of reporting only for specific data (for example, for valuation and collateral once a week as indicated above), on the assumption that the data sent weekly is not the aggregation of reports that would otherwise have been sent on a daily basis and (ii) the proposal to move from T+1 to T+2 will give reporting agents more time to review reports and correct any errors.
• Energy Traders Europe takes a more neutral stance stating that it does not believe that reducing the frequency of reporting (e.g. from daily to weekly for instance) automatically leads to a meaningful reduction in the overall burden. Instead, it advocates for ESMA to review its requirements and justify changes to reporting requirements only where there is clear added value and demonstrable efficiency gains.