Why the Next Wave May Be More Complex
Seventeen years after the G20 Pittsburgh summit set the foundations for the global derivatives regulatory reporting framework, many firms might be tempted to believe that the hard work is now largely complete. Across 2024 and 2025, major jurisdictions delivered their long-awaited reporting “rewrites”, introducing more common identifiers, data standards and messaging formats, all intended to move the industry closer to a more harmonised global model.
Yet for IT, operations, compliance and regulatory reporting leaders, the reality is more complicated. The rewrites have improved the framework, but they have not eliminated fragmentation. In fact, the next phase of the regulatory journey may create a new and potentially more disruptive challenge: regulators are now seeking to simplify their own regimes, but they are doing so in different ways, at different speeds and with different policy objectives. The result could be less global harmonisation, not more.
The rewrites helped, but they did not solve fragmentation
The industry has made meaningful progress. Many jurisdictions now share a common vocabulary of UTIs, UPIs, CDEs and ISO 20022-based reporting. But implementation remains inconsistent. Not all regimes have adopted the ISO message standards. Even where common standards exist, regulations vary in the number of reportable fields, the interpretation of those fields and the validation rules applied to them.
Some regulators have introduced additional local fields beyond CDEs. Others have adopted the same fields but issued different population rules. Some jurisdictions require dual-sided reporting, while others operate single-sided models. Even supposedly harmonising tools such as the UPI can lead to inconsistent outcomes, with the same product sometimes reported with different UPIs across firms due to a lack of detailed template guidance.
For global financial institutions, this means that each reporting regime still needs to be treated as a distinct operational and technology challenge. A firm active across the EU, UK, US and other markets cannot simply build once and deploy everywhere. It must manage overlapping but different rules, workflows, validations, controls and exception processes. The industry has taken two steps forward, but maybe one step back.
The new theme: simplification and burden reduction
The next wave of change is being driven by political and regulatory pressure to reduce administrative burden and improve market competitiveness. Governments and regulators recognise that firms are reporting large volumes of data, not all of which is useful, reliable or proportionate. There is growing industry support for the idea that regulators should collect less data, but of higher quality. Some, but not all, of the major regulators are considering reducing the scope of reportable fields.
This objective is welcome. However, the risk is that each jurisdiction simplifies in its own way. Instead of converging on a common global model, regulators may inadvertently introduce more divergence and present firms with significant implementation challenges to move from the present imperfect state to a new imperfect state!
Europe: ambitious simplification with major implementation questions
In the European Union, the European Commission has set a broad objective to reduce administrative burden by 25% for businesses during the 2024 to 2029 Commission term. ESMA is now examining how trade-based regulatory reporting can be simplified across MiFIR, EMIR and SFTR and has recently issued its Final Report on its Call for Evidence consultation.
ESMA’s conclusion is that these three regimes should be integrated into a “Report Once” reporting model where market participants would submit transaction-related data once through a coherent set of reporting templates providing the information needed across the three regimes, potentially supported by a single reporting hub.
The long-term logic is ambitious: reduce field duplication and simplify reporting channels. But the implementation challenges are significant and there is no meaningful desire to reduce the scope of information to be reported. MiFIR, EMIR and SFTR have different regulatory objectives. MiFIR focuses on market monitoring, while EMIR and SFTR are more concerned with systemic risk. How agile will this Report Once model be when regulatory changes are required for each specific regime?
In addition, and possibly ahead of the implementation of the Report Once model, the European Parliament, European Commission and ESMA are considering introducing Mandatory delegated reporting for EMIR and SFTR covering all counterparties – not just NFC-. If expanded, it could reduce the direct reporting burden for some counterparties, but it may also transfer data collection and maintenance obligations to the sell-side.
The UK: a more pragmatic but divergent path
The UK is taking a different route. The FCA and Bank of England have indicated that a full “report once” model may not deliver benefits proportionate to its implementation cost. Instead, they are looking to streamline MiFIR, EMIR and SFTR while keeping the regimes distinct.
For MiFIR transaction reporting, the FCA has proposed practical reductions, including cutting reportable fields from 65 to 52, removing EU-only TOTV transactions from scope (leveraging UK/EU NCA data sharing to maintain regulatory oversight), excluding FX derivatives, reducing instrument reference data fields and shortening the back-reporting period. The FCA’s broader direction is to collect data only where needed, reuse data where possible and enrich reporting with publicly available sources.
The FCA has set up a Transaction and Post-trade Reporting Harmonisation Task Force to investigate the streamlining and harmonisation of transaction reporting across MiFIR, EMIR and SFTR. We don’t want to prejudge anything, but we suspect this will end up with a different conclusion to the EU approach.
The US: simplification complicated by multiple regulators
The United States is also reviewing reporting burden, but its structure is more complex because OTC derivatives oversight is split between the CFTC for swaps and the SEC for security-based swaps. The two agencies have signed a Memorandum of Understanding to support harmonisation, and their recent request for comment asks whether reporting requirements can be clarified, simplified, harmonised or made more effective.
The questions being asked are highly relevant: is too much information being reported, which data elements are critical, which are duplicative, which are too difficult to report accurately, should rules be machine-readable, and are there issues with identifiers such as UPI and LEI? This creates an important opportunity for the industry, but also another source of change that may not align with European or UK reforms.
New Regimes
Whilst the forthcoming South African reporting is closely aligned to existing G20 reporting, it is interesting to note that both the new Indian and Chinese derivatives reporting regimes are deviating from the G20 consensus and introducing proprietary fields.
What this means for decision makers
For IT and operations leaders, the key message is clear: the end of the G20 rewrite cycle does not mean regulatory reporting change is over. It likely marks the beginning of a new phase. Over the next several years, firms may need to respond to new templates, changed field requirements, new reporting destinations, revised validation rules, altered reporting scopes and different delegation models.
The strategic risk is that simplification for regulators does not automatically mean simplification for firms. If each jurisdiction reduces burden differently, global firms may face higher change costs, more complex control frameworks and greater reconciliation challenges. Maintaining in-house reporting stacks for every regime will become harder to justify as rules continue to diverge.
This is where mutualised vendor platforms become increasingly important. A specialist regulatory reporting provider can track regulatory developments, interpret rule changes, update templates, manage validation changes and absorb much of the implementation complexity within a core product. Instead of each firm independently rebuilding for every jurisdictional change, the cost and expertise can be shared across a client base.
The industry should welcome burden reduction, but decision makers should not confuse it with stability. The next five to seven years may bring substantial regulatory reporting change. Firms that prepare now, modernise their operating models and partner with vendors capable of insulating them from fragmented change will be better placed to control cost, reduce risk and maintain compliance as the next wave arrives.
