Key Takeaways

• ESMA published its Interim Report on 4 May 2026, summarising 108 consultation responses to its June 2025 Call for Evidence on simplifying EU financial transaction reporting

• Two simplification options remain in play: Option 1a (instrument-based delineation of EMIR and MiFIR) and Option 2a ("report once" unified framework covering MiFIR, EMIR, and SFTR)

• Options 1b and 2b have been eliminated from further consideration

• Dual-sided reporting under EMIR and SFTR is the single most cited cost driver, and its revision is now a standalone priority across all remaining options

• A full cost-benefit analysis (CBA) by an independent consultancy is underway; the Final Report is due July 2026

• The review covers MiFIR, EMIR, and SFTR, but the door is not closed on REMIT and other regimes in the longer term

What Is the ESMA Holistic Review of Regulatory Reporting?

Financial transaction reporting in the EU has grown organically across multiple regulatory regimes, including MiFIR, EMIR, SFTR, and REMIT, each with its own scope, templates, timelines, and reporting channels. The result is a fragmented, overlapping, and increasingly expensive compliance landscape.

In June 2025, ESMA launched a Call for Evidence (CfE) to take stock: to identify where the real cost drivers lie, assess the appetite for structural reform, and build a case for change at the legislative level. With 108 responses received from buy side, sell side, trading venues, CCPs, trade repositories, public authorities, energy firms, and industry associations, the engagement was substantial.

The Interim Report, published on 4 May 2026, is not a set of recommendations. It is a structured summary of what stakeholders said and an early signal of where ESMA is heading before the Final Report lands in July 2026.

What Are the Main Cost Drivers in EU Transaction Reporting?

Stakeholder responses converged on a familiar list of grievances, with clear prioritisation.

Dual-sided reporting tops the list. Under EMIR and to a lesser extent SFTR, both counterparties to a trade must independently submit reports for the same transaction. The reconciliation burden, including matching submissions, resolving breaks, and investigating mismatches, is widely cited as resource-intensive, particularly for smaller firms. Poor pairing rates in practice have undermined the original data quality rationale.

Overlapping reporting obligations across MiFIR and EMIR for the same instruments, particularly OTC derivatives, force firms to maintain parallel infrastructures, parallel validations, and parallel compliance processes.

Fragmented reporting channels add further cost. Firms must submit to TRs, ARMs, APAs, RRMs, and NCAs across different formats and validation rules. The inconsistency in how competent authorities access and consume the data compounds the problem.

Frequent and unsynchronised regulatory changes were also flagged repeatedly, creating a cycle of IT adjustments and compliance reviews that offers no stable baseline from which to operate efficiently.

What Are the Two Simplification Options Still Under Assessment?

Option 1a: Instrument-Based Delineation of EMIR and MiFIR

Option 1a would remove the overlap between MiFIR and EMIR by splitting reporting scope along instrument lines: OTC derivatives under EMIR, exchange-traded derivatives (ETDs) under MiFIR. This would eliminate the dual-reporting of the same instrument under two regimes, while preserving the supervisory objectives of each framework.

Stakeholder feedback characterises Option 1a as pragmatic and relatively lower-cost to implement, representing an incremental improvement rather than a structural transformation. Critically, most respondents see it as a phased pathway toward Option 2a, rather than an endpoint in itself.

ESMA has refined Option 1a into three sub-variants (1ai, 1aii, and 1aiii), primarily distinguishing between those that include schema changes to preserve market abuse monitoring capability and those that do not. All three variants include a revision of dual-sided reporting under EMIR and SFTR. These sub-variants will be assessed as part of the CBA.

Option 2a: The "Report Once" Framework

Option 2a is the long-term target: a single unified reporting framework that integrates MiFIR, EMIR, and SFTR into one legal regime, one template, and one reporting channel. Dual-sided reporting would be revised, position reporting would be replaced with transaction-derived calculations, and the structural fragmentation would be eliminated at its root.

The industry broadly endorses the vision. The concerns are practical: the implementation timeline is 5 to 7 years, the legal changes are substantial, and the governance framework, particularly around data access for NCAs, needs significant design work. Respondents consistently called for a phased rollout, a transparent roadmap, and close industry engagement throughout, with the T+1 transition governance model cited as a benchmark.

ESMA has confirmed that Option 2a is the preferred long-term solution and will be subject to full CBA analysis.

Why Were Options 1b and 2b Dropped?

Option 1b proposed an event-based delineation, separating transaction reporting from post-trade events across regimes. It attracted near-universal opposition. Stakeholders found no meaningful simplification benefit and identified significant implementation risk. It is no longer under consideration.

Option 2b proposed extending the "report once" principle beyond MiFIR, EMIR, and SFTR to include REMIT, Solvency II, and others. It was viewed as overly ambitious and structurally misaligned: different regimes serve different supervisory purposes and are governed by different authorities. It will not form part of the initial CBA, though REMIT's potential longer-term inclusion was noted.

What Is Changing for Dual-Sided Reporting Under EMIR and SFTR?

One of the clearest signals from the Interim Report is that dual-sided reporting revision is no longer contingent on the choice of reform option. It is treated as a priority measure that should be addressed regardless of which direction the final framework takes.

ESMA's preferred approach is a model of mandatory delegated reporting, assigning reporting responsibility to the more sophisticated counterparty such as the dealer, CCP, or venue, alongside the removal of the reconciliation process currently triggered by dual-side submissions. SFTR is now explicitly included in the scope of this revision, in addition to EMIR.

The caveat is that some public authorities and a minority of respondents retained concerns about data quality and supervisory gaps in a single-sided model. Any transition will require safeguards including clear allocation of responsibility, auditable communication mechanisms, and robust NCA access to reported data.

What Does the ESMA Review Mean for Reporting Channels?

76% of respondents expressed support for some form of centralisation of reporting channels, including fewer endpoints, harmonised validation rules, and a more coherent submission architecture. The idea of ESMA acting as a central hub gained traction, particularly in the context of Option 2a.

The conditions attached to that support are significant: robust governance, phased delivery, preservation of NCA supervisory roles, and optional rather than mandatory use of intermediaries. The consensus is that the current multi-channel structure is unsustainable, but that any redesign must be carefully sequenced around the broader reform.

What Is the ESMA Regulatory Reporting Reform Timeline?

The Final Report will include formal recommendations to policymakers and the full CBA across Option 1a variants and Option 2a. Any Level 1 legislative changes will then require a proposal from the European Commission and agreement from the European Parliament and Council.

What Near-Term Measures Has ESMA Identified?

ESMA has flagged a set of changes that could be recommended in the Final Report as earlier-stage relief measures, subject to Level 1 legislative change:

• Revision of dual-sided reporting under EMIR and SFTR

• Exclusion of certain corporate actions from MiFIR reporting scope

• Clarification of ETD reporting scope under EMIR

• Simplification of intragroup reporting exemptions under EMIR

• Revision of SFTR settlement fail reporting (overlap with CSDR)

• Shortened back-reporting timelines, reducing from five years subject to NCA override rights

Even "near-term" in this context means dependent on the legislative process. Firms should not expect these changes before 2028 at the earliest.

Frequently Asked Questions: ESMA Holistic Review 2026

What is the ESMA holistic review of regulatory reporting? It is a comprehensive review launched by ESMA in June 2025 to simplify and harmonise EU financial transaction reporting across MiFIR, EMIR, and SFTR. The review aims to reduce duplicative reporting obligations, lower operational costs for market participants, and improve data quality for supervisors.

Who does the ESMA regulatory reporting review affect? The review affects all firms subject to transaction reporting obligations under MiFIR, EMIR, and SFTR. This includes investment firms, banks, asset managers, trading venues, CCPs, trade repositories, energy market participants, and non-financial counterparties active in derivatives markets.

What is Option 2a "report once" in the ESMA review? Option 2a proposes integrating MiFIR, EMIR, and SFTR into a single unified reporting framework where firms submit one report that satisfies all three regimes. It represents the preferred long-term target solution identified by ESMA, with an expected implementation horizon of five to seven years.

What is happening with dual-sided reporting under EMIR? Dual-sided reporting, where both counterparties to a trade independently report the same transaction, is widely identified as the biggest cost driver in EU transaction reporting. ESMA is assessing a move to mandatory delegated single-sided reporting, with the more sophisticated counterparty (such as the dealer or CCP) assuming reporting responsibility. Any revision would also remove the associated reconciliation requirements. SFTR is included in the scope of this revision.

When will the ESMA Final Report on regulatory reporting simplification be published? ESMA expects to publish the Final Report, including formal recommendations and a full cost-benefit analysis, by July 2026.

Does the ESMA review cover REMIT reporting? The primary scope of the current review is MiFIR, EMIR, and SFTR. REMIT was considered under Option 2b, which has been dropped from the immediate CBA. However, its potential inclusion in a longer-term "report once" framework has not been ruled out.

How KOR Can Help

The ESMA review is still in motion, but the direction of travel is clear. Firms that understand the landscape now will be better positioned to engage with consultations, adapt their systems intelligently, and avoid being caught out when Level 1 changes eventually arrive.

KOR works across the full transaction reporting lifecycle under MiFIR, EMIR, and SFTR. Our reporting specialists can help you:

• Assess your current dual-sided reporting exposure and model what single-sided delegation would mean for your operational structure

• Understand the overlap between your EMIR and MiFIR obligations and how the Option 1a instrument-based delineation would affect your reporting footprint

• Evaluate your reporting channel architecture and identify where consolidation could reduce cost before regulatory change compels it

• Track and engage with upcoming consultations on the CBA, the Final Report, and any subsequent Level 2 workstreams

The simplification agenda is an opportunity, not just to comply, but to build more resilient and efficient reporting infrastructure. Firms that treat it that way will be better positioned for whatever the Final Report recommends.

If you want to understand what the ESMA review means for your specific reporting obligations, speak to the KOR team today.

Related reading: REMIT II Implementing Regulation: What's New, What's Changed, and What Market Participants Need to Do Next