Simplifying Transaction Reporting

AMAFI has published its proposals to ESMA aimed at further simplifying transaction reporting under MiFIR, EMIR, and SFTR. It welcomes ESMA’s guidance, particularly the “report once” principle, but emphasizes that its benefits are not guaranteed. Several prerequisites must be defined in consultation with market participants: operational model, reporting responsibilities, the role of intermediaries, quality controls, and the scope of data. These decisions will determine the actual cost savings that can be achieved.

The role of intermediaries is a major issue. The future system could require their involvement rather than allowing direct reporting to the authorities (as proposed by Markus Ferber within the framework of the MISP). Two points to consider:

• Costs: Under EMIR, central trade repository fees account for 26% of sell-side firms’ recurring costs. Risk of duplication under MiFIR, not taken into account in the “report once” impact assessment.
• Sovereignty: Dependence on non-European service providers and associated geopolitical risks.

The short- and medium-term measures adopted by ESMA remain insufficient. Less ambitious than the scenarios considered in its interim report and evaluated in the impact assessment, the cost savings they would generate have not been quantified. The estimated 24% reduction in recurring costs must therefore be viewed in context.

AMAFI calls for additional simplifications without waiting for the “report once” initiative:

• Delegated reporting: extension to clearing houses, clearing members, and financial clients under EMIR, as well as to lending agents under SFTR, subject to net savings.
• Reporting fields: Extension to EMIR and SFTR of the de-prioritization envisaged under MiFIR, based on their usefulness for supervision.
• Reconciliation: Significant reduction in the scope of data subject to reconciliation under EMIR and SFTR, focusing on essential data and material discrepancies.
• Foreign exchange derivatives: Elimination of MiFIR reporting, which is already covered by EMIR, as in the United Kingdom (annual savings estimated by the FCA at £56.7 million).
• Exchange-Traded Derivatives (ETDs): Waiver of EMIR reporting requirements, subject to verification that supervisory needs are met through other sources.

A competitiveness challenge: While the United Kingdom has already identified areas for streamlining and the United States is reviewing its reporting requirements, the EU must accelerate efforts to reduce regulatory costs while maintaining the effectiveness of oversight.

AMAFI’s Response to ESMA