Transaction reporting takes on new significance as regulators tune in
April 2026
Quinn Perrott, co-CEO at TRAction, explores how recent EMIR, MiFID, and global regulatory rewrites are reshaping transaction reporting, and why data quality, global alignment, and the right regtech partnerships are becoming critical for firms under increasing supervisory scrutiny
Image: tadamichi/stock.adobe.com
Since the EU European Market Infrastructure Regulation (EMIR) Refit came into effect in April 2024 and the UK EMIR Refit and Australian Securities and Investments Commission (ASIC) and Monetary Authority of Singapore (MAS) Rewrites in the second half of 2024, regulatory reporting for transactions has become even harder. These amendments to regulations along with amendments to Markets in Financial Instruments Directive (MiFID) have impacted the finance sector, crypto markets and non-financial counterparties. Although these regulations have resulted in an increase in nuanced compliance requirements, the intent for the future path for these industries is to have global synchronisation and for a more efficient, transparent and organised system, particularly in relation to trade reporting.
Given the influx of compliance requirements, financial firms should be considering regtech providers that can efficiently help them to tackle the regulatory burden and make things simpler for them — this is particularly the case for smaller impacted firms. RegTech providers should be equipped with the relevant technology and regulatory expertise to assist their clients in addressing their compliance requirements. Efficient providers will help to eliminate the space for errors and potentially penalties from regulators for non-compliance.
Regulatory impacts on the financial sector
The Refit and Rewrite regulations for transaction reporting apply to all derivatives. Under these regulations, there are requirements to provide more data to the trade repositories and to carry out accuracy and completeness processes. Regulators have demonstrated immense force in insisting on the accuracy of reporting and have penalised financial firms and banks over the last few years to reinforce the seriousness of the issue. The regulations are also more demanding now as there has been an increase in data fields and additional identifiers required for input.
Under upcoming MiFID II changes, there will be a broadening of the definition of trading venues which may bring into scope contracts for difference (CFDs) on additional FX products. This means there may be more reporting required by firms and firms that did not have to previously report their trades under MiFID II and Markets in Financial Instruments Regulation (MIFIR).
Separately, ASIC firms now have to report collected collateral in relation to derivatives on behalf of their clients, whereas prior to ASIC Rewrite, they only had to report the collateral that was posted.
Hurdles small-to-medium businesses face which impact their selection of service providers
It is important that firms select a global regtech provider which has support and offices in the time zones and jurisdictions in which they have obligations to comply with. Given the expanding list of regulatory requirements from various parts of the globe and in various industries, it can be extremely difficult for small-to-medium-sized firms with a small overall headcount in their compliance division. It is not possible for these firms to have experts in all areas where compliance is required, for example, anti-money laundering (AML), trade reporting, debt capital markets, and general financial regulatory matters such as licensing and record keeping, which typically exist in larger institutions such as banks. In smaller firms, the role of the compliance manager or division can incorporate elements of a vendor manager or regulatory risk co-ordinator as they ultimately put their efforts into engaging specialist regtech vendors and managing them holistically across the business.
When choosing a service provider, firms should ensure that the provider is not just a technology platform but one that understands the compliance or regulatory area they are offering a solution for. This then results in vendors being able to provide clients with guidance on how to comply and help prompt clients to have the right practices and behaviours in place.
Factors to consider when choosing a regtech provider
The vendor selection process for financial firms currently necessitates choosing a service provider according to whether they are an expert for a particular regulation or whether they have coverage across a large number of regulations applicable to the firm. Do not be swayed purely by the fact that a regtech provider may have the ability to assist you for a multitude of disparate reporting regimes, jurisdictional locations and time zones. For some vendors, broad coverage may mean a lack of technical expertise and understanding.
There are providers that cover regulatory transaction reporting for multiple regulations and jurisdictions such as EMIR, MiFIR, Securities Financing Transactions Regulation (SFTR), ASIC, Commodity Futures Trading Commission (CFTC), US Securities and Exchange Commission (SEC), MAS, Canadian, and US regulations. Other vendors incorporate analogous requirements such as trade surveillance, trade publication, post-trade risk reduction (PTRR) and more. If a firm is subject to more than one regulation and regulator e.g. due to having subsidiaries or branches in offshore locations, it would make sense to use a provider that understands and has infrastructure and support for all the jurisdictions they are impacted by however, this should be looked at seriously to ensure that the provider actually has the expertise in regulations that steer your firm. Service providers should ultimately be chosen because they are a specialist to the regulations your business model is predominantly impacted by.
The service provider should also be able to perform multiple services such as acting as an intermediary between firms and trade repositories and approved reporting mechanisms (i.e. acting as a delegated service provider), providing the technology for trade reporting and providing legal and regulatory guidance. Given the increased scrutiny and due diligence required from regulations such as Digital Operational Resilience Act (DORA), on the technology and service providers, having one service provider performing all tasks required will mean less overheads and costs for firms and also less room for discrepancies and regulatory confusion. For example, it is quite common that firms come across issues when they have more than one delegate reporting entities, particularly where large organisations which have several subsidiaries split out their reporting to various delegates — this can lead to either duplication of reporting or trades being missed in the reporting process.
Firms should look at certain key attributes and the business model of the regtech provider when selecting a provider — this includes consideration of aspects such as their capacity over various regulations and jurisdictions, technology, compliance and legal functions and their growth factor. If, for example, a firm lacks the internal legal resources then they should try to work with a provider that has a solid legal team with expertise in the area you need assistance with.
Finance businesses use cutting-edge technology. Therefore, they should expect the same high-tech requirements and capabilities from their service providers. It might be worthwhile ascertaining if the service providers you have in mind have the most updated technological platforms or other infrastructure in their business operations. Consideration should also include whether the media has discussed them in a positive light and if there is any reference to their business being one that is trending or evolving in the market. Firms could also research which service providers have assisted financial firms that have been fined over the last few years — this may be an indicator of where the delegated reporting relationship has failed and who not to select.
How are multi-jurisdictional regulatory movements helping with efficiency, transparency and global alignment?
Although regulatory changes over the last decade have become quite onerous and costly for firms, the bright side is that firms can also take advantage of global harmonisation efforts. This will eventually lead to an ‘easier to automate’ trade reporting process. Initiatives such as the Common Domain Elements usage; consistently using legal entity identifiers (LEIs) from the Global Legal Entity Identifier Foundation (GLEIF), a universal global registry aiding in the identification of parties to worldwide transactions; and using the XML format for submissions, will lead to improved global alignment in transactions.
The implementation of identifiers such as UPIs and UTIs has also paved the way towards uniform and consistent reporting, meaning less errors and rejection of trades by the trade repositories (TRs). The International Organization of Securities Commissions’ (IOSCO’s) UTI waterfall introduction now unifies the method around who the generating entity (of the UTI) is. Both parties to a trade should be submitting the same UTI in their trade reports. In some instances, UPIs must also be matched and can be obtained from the UPI Library maintained by Association of National Numbering Agencies (ANNA) Derivatives Service Bureau (DSB).
Pairing and matching requirements for Europe (which requires matching of fields like UTI, UPI, ISIN, names of counterparties and venue of execution) are the current frontier of liaison between counterparties as they seek to ensure their reporting is being done correctly and avert regulatory scrutiny. Reports that do not match under the EMIR regime now are flagged from TRs, requiring correction or re-submission. Similar movements towards pairing and matching are developing for other regulators like ASIC who are also following the UTI waterfall. There have been commensurate moves by ASIC-approved TRs towards matching of their received trades through available reports each day.
Overall, transaction reporting upgrades and more detailed regulatory requirements should lead to efficiency and transparency and reduce operational costs in the long-term. Reporting entities can also take it upon themselves to provide confirmation of these details and how they should be reported in their trading and hedging documentation (includingthe International Swaps and Derivatives Association’s). For example, when negotiating such agreements with your liquidity provider or counterparty, the generating entity for the UTI can be specified at the outset, along with provision by the product issuer of the unique product identifiers (UPIs) or ISIN. Such agreements can even contain representations that parties will ensure there is timely LEI renewal, in addition to the description of the efforts that will be taken in matching and pairing certain trade reporting fields.
Why is good data lineage becoming so important?
Regulators are now demanding improved and clearer data quality. This is the intent of years of regulatory change in the financial markets and trading space. Having good data lineage, i.e. the process of being able to see data from origination to end, is becoming a focus point for regulators. Creating a golden source (e.g. for transactions) will allow firms to utilise regulatory technical solutions with more ease. All the work being done with the collection and centralisation of quality data from firms will also be able to be optimised for future business operations and will be relevant for machine or AI learning. Having exemplary data lineage will assist in the future and build the pathway for AI to be trained and assist in automating processes and making trade reporting and being regulatory compliant easier and less of a hassle.
RegTech: Helping to manage obligations and simplify the trade reporting process
Trade reporting has become even more intricate and complicated since the recent Refit and Rewrite of the existing trade reporting regulations, including upcoming changes to MiFID. Financial firms in the market are now facing much more complexity in their compliance departments. Over time there should be further global synchronisation of trade reporting — creating a reduction in costs for the market, more efficiency and ease in following the same mode of reporting for all regulators and greater global transparency of transactions. Small-to-medium firms will have to source appropriately equipped regtech providers that have the right technological infrastructure and regulatory know-how to help guide their clients to a path of smooth compliance.
Given the influx of compliance requirements, financial firms should be considering regtech providers that can efficiently help them to tackle the regulatory burden and make things simpler for them — this is particularly the case for smaller impacted firms. RegTech providers should be equipped with the relevant technology and regulatory expertise to assist their clients in addressing their compliance requirements. Efficient providers will help to eliminate the space for errors and potentially penalties from regulators for non-compliance.
Regulatory impacts on the financial sector
The Refit and Rewrite regulations for transaction reporting apply to all derivatives. Under these regulations, there are requirements to provide more data to the trade repositories and to carry out accuracy and completeness processes. Regulators have demonstrated immense force in insisting on the accuracy of reporting and have penalised financial firms and banks over the last few years to reinforce the seriousness of the issue. The regulations are also more demanding now as there has been an increase in data fields and additional identifiers required for input.
Under upcoming MiFID II changes, there will be a broadening of the definition of trading venues which may bring into scope contracts for difference (CFDs) on additional FX products. This means there may be more reporting required by firms and firms that did not have to previously report their trades under MiFID II and Markets in Financial Instruments Regulation (MIFIR).
Separately, ASIC firms now have to report collected collateral in relation to derivatives on behalf of their clients, whereas prior to ASIC Rewrite, they only had to report the collateral that was posted.
Hurdles small-to-medium businesses face which impact their selection of service providers
It is important that firms select a global regtech provider which has support and offices in the time zones and jurisdictions in which they have obligations to comply with. Given the expanding list of regulatory requirements from various parts of the globe and in various industries, it can be extremely difficult for small-to-medium-sized firms with a small overall headcount in their compliance division. It is not possible for these firms to have experts in all areas where compliance is required, for example, anti-money laundering (AML), trade reporting, debt capital markets, and general financial regulatory matters such as licensing and record keeping, which typically exist in larger institutions such as banks. In smaller firms, the role of the compliance manager or division can incorporate elements of a vendor manager or regulatory risk co-ordinator as they ultimately put their efforts into engaging specialist regtech vendors and managing them holistically across the business.
When choosing a service provider, firms should ensure that the provider is not just a technology platform but one that understands the compliance or regulatory area they are offering a solution for. This then results in vendors being able to provide clients with guidance on how to comply and help prompt clients to have the right practices and behaviours in place.
Factors to consider when choosing a regtech provider
The vendor selection process for financial firms currently necessitates choosing a service provider according to whether they are an expert for a particular regulation or whether they have coverage across a large number of regulations applicable to the firm. Do not be swayed purely by the fact that a regtech provider may have the ability to assist you for a multitude of disparate reporting regimes, jurisdictional locations and time zones. For some vendors, broad coverage may mean a lack of technical expertise and understanding.
There are providers that cover regulatory transaction reporting for multiple regulations and jurisdictions such as EMIR, MiFIR, Securities Financing Transactions Regulation (SFTR), ASIC, Commodity Futures Trading Commission (CFTC), US Securities and Exchange Commission (SEC), MAS, Canadian, and US regulations. Other vendors incorporate analogous requirements such as trade surveillance, trade publication, post-trade risk reduction (PTRR) and more. If a firm is subject to more than one regulation and regulator e.g. due to having subsidiaries or branches in offshore locations, it would make sense to use a provider that understands and has infrastructure and support for all the jurisdictions they are impacted by however, this should be looked at seriously to ensure that the provider actually has the expertise in regulations that steer your firm. Service providers should ultimately be chosen because they are a specialist to the regulations your business model is predominantly impacted by.
The service provider should also be able to perform multiple services such as acting as an intermediary between firms and trade repositories and approved reporting mechanisms (i.e. acting as a delegated service provider), providing the technology for trade reporting and providing legal and regulatory guidance. Given the increased scrutiny and due diligence required from regulations such as Digital Operational Resilience Act (DORA), on the technology and service providers, having one service provider performing all tasks required will mean less overheads and costs for firms and also less room for discrepancies and regulatory confusion. For example, it is quite common that firms come across issues when they have more than one delegate reporting entities, particularly where large organisations which have several subsidiaries split out their reporting to various delegates — this can lead to either duplication of reporting or trades being missed in the reporting process.
Firms should look at certain key attributes and the business model of the regtech provider when selecting a provider — this includes consideration of aspects such as their capacity over various regulations and jurisdictions, technology, compliance and legal functions and their growth factor. If, for example, a firm lacks the internal legal resources then they should try to work with a provider that has a solid legal team with expertise in the area you need assistance with.
Finance businesses use cutting-edge technology. Therefore, they should expect the same high-tech requirements and capabilities from their service providers. It might be worthwhile ascertaining if the service providers you have in mind have the most updated technological platforms or other infrastructure in their business operations. Consideration should also include whether the media has discussed them in a positive light and if there is any reference to their business being one that is trending or evolving in the market. Firms could also research which service providers have assisted financial firms that have been fined over the last few years — this may be an indicator of where the delegated reporting relationship has failed and who not to select.
How are multi-jurisdictional regulatory movements helping with efficiency, transparency and global alignment?
Although regulatory changes over the last decade have become quite onerous and costly for firms, the bright side is that firms can also take advantage of global harmonisation efforts. This will eventually lead to an ‘easier to automate’ trade reporting process. Initiatives such as the Common Domain Elements usage; consistently using legal entity identifiers (LEIs) from the Global Legal Entity Identifier Foundation (GLEIF), a universal global registry aiding in the identification of parties to worldwide transactions; and using the XML format for submissions, will lead to improved global alignment in transactions.
The implementation of identifiers such as UPIs and UTIs has also paved the way towards uniform and consistent reporting, meaning less errors and rejection of trades by the trade repositories (TRs). The International Organization of Securities Commissions’ (IOSCO’s) UTI waterfall introduction now unifies the method around who the generating entity (of the UTI) is. Both parties to a trade should be submitting the same UTI in their trade reports. In some instances, UPIs must also be matched and can be obtained from the UPI Library maintained by Association of National Numbering Agencies (ANNA) Derivatives Service Bureau (DSB).
Pairing and matching requirements for Europe (which requires matching of fields like UTI, UPI, ISIN, names of counterparties and venue of execution) are the current frontier of liaison between counterparties as they seek to ensure their reporting is being done correctly and avert regulatory scrutiny. Reports that do not match under the EMIR regime now are flagged from TRs, requiring correction or re-submission. Similar movements towards pairing and matching are developing for other regulators like ASIC who are also following the UTI waterfall. There have been commensurate moves by ASIC-approved TRs towards matching of their received trades through available reports each day.
Overall, transaction reporting upgrades and more detailed regulatory requirements should lead to efficiency and transparency and reduce operational costs in the long-term. Reporting entities can also take it upon themselves to provide confirmation of these details and how they should be reported in their trading and hedging documentation (includingthe International Swaps and Derivatives Association’s). For example, when negotiating such agreements with your liquidity provider or counterparty, the generating entity for the UTI can be specified at the outset, along with provision by the product issuer of the unique product identifiers (UPIs) or ISIN. Such agreements can even contain representations that parties will ensure there is timely LEI renewal, in addition to the description of the efforts that will be taken in matching and pairing certain trade reporting fields.
Why is good data lineage becoming so important?
Regulators are now demanding improved and clearer data quality. This is the intent of years of regulatory change in the financial markets and trading space. Having good data lineage, i.e. the process of being able to see data from origination to end, is becoming a focus point for regulators. Creating a golden source (e.g. for transactions) will allow firms to utilise regulatory technical solutions with more ease. All the work being done with the collection and centralisation of quality data from firms will also be able to be optimised for future business operations and will be relevant for machine or AI learning. Having exemplary data lineage will assist in the future and build the pathway for AI to be trained and assist in automating processes and making trade reporting and being regulatory compliant easier and less of a hassle.
RegTech: Helping to manage obligations and simplify the trade reporting process
Trade reporting has become even more intricate and complicated since the recent Refit and Rewrite of the existing trade reporting regulations, including upcoming changes to MiFID. Financial firms in the market are now facing much more complexity in their compliance departments. Over time there should be further global synchronisation of trade reporting — creating a reduction in costs for the market, more efficiency and ease in following the same mode of reporting for all regulators and greater global transparency of transactions. Small-to-medium firms will have to source appropriately equipped regtech providers that have the right technological infrastructure and regulatory know-how to help guide their clients to a path of smooth compliance.
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