ESMA simplifies fund and transaction reporting: less burden and more efficiency for EU markets

ESMA reforms reporting in Europe: aim to reduce costs and complexity

The European Securities and Markets Authority (ESMA) has launched a harmonized approach to fund reporting and transaction reporting, with the aim of streamlining processes and reducing the operational burden for financial operators. The reform, presented in two reports published today, is part of the broader simplification and cost reduction agenda launched by ESMA last year.

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The new framework for fund reporting

The first report, dedicated to the integrated collection of fund data, introduces a common framework to replace the fragmented national systems. At the heart of the new system is a single reporting template designed to adapt to different fund sizes and investment strategies, maintaining proportionality and responding to supervisory needs.

The operational model proposed by ESMA is hybrid: validation, storage, and analysis of data will be managed at the European level, while collection will remain the responsibility of national authorities. This centralized approach will facilitate data sharing among authorities, reducing duplicate requests and improving the efficiency of supervision.

The implementation roadmap

The first phase of implementation will focus on integrating reporting for AIFMD and UCITS funds, while the second phase will extend the framework to other reporting obligations. The next steps include the development of regulatory and implementation technical standards (RTS, ITS), which will be presented next year.

The reform of transaction reporting

The second report, based on feedback from over 100 respondents to the previous call for evidence, identifies the main obstacles in the current transaction reporting frameworks. Among the problems highlighted: overlapping and inconsistent requirements, frequent and unsynchronized regulatory changes, fragmented reporting channels, and double reporting.

To address these challenges, ESMA is evaluating approaches based on dual tools and simplifications, with the long-term goal of implementing a "report once" framework for EMIR, MiFIR, and SFTR. However, the report does not yet contain definitive policy recommendations, pending a complete cost-benefit analysis.

Market operator involvement

In the coming months, ESMA will intensify engagement with market operators, culminating in a public hearing on May 28. Final recommendations will be published by mid-year, marking a fundamental step in simplifying transaction reporting in Europe.

The context: ESMA's simplification agenda

Both reports are the result of ESMA's Simplification and Burden Reduction (SBR) initiative, launched to address the growing complexity and operational costs resulting from EU reporting requirements. The reform aims to improve data quality, the effectiveness of supervision, and, above all, to reduce the operational burden for financial operators.

The approach proposed by ESMA represents a significant change in the landscape of European financial reporting. By adopting harmonized frameworks and promoting data sharing, the authority aims to improve the efficiency of supervision and strengthen the stability of financial markets.

At this point, the next phases of the project will include the development of detailed technical standards and further consultation with stakeholders. The complete adoption of the new system will require a coordinated effort between ESMA, national competent authorities (NCAs), and market operators.

One of the most relevant aspects of the new framework is the promise to reduce the duplication of reporting efforts. By harmonizing reporting requirements, ESMA aims to minimize the administrative burden on financial operators, allowing them to focus on their core activities.