The Next Wave in Derivatives Reporting
Why simplification, digitisation, and supervisory technology are no longer optional
Last week in London, regulators, market participants, and market infrastructure providers came together to discuss the future of derivatives reporting. While the conversations covered a wide range of regulatory and operational topics, one message came through loud and clear: derivatives reporting transformation is now firmly underway.
This is no longer about incremental rule changes or another cycle of tactical remediation. Instead, we are seeing a shift toward structural reform, enabled by technology and driven by a desire for better data, stronger supervision, and lower long-term cost.
Below, we share our key takeaways from the discussion and what they mean for firms navigating the next phase of derivatives reporting transformation.
From rulebooks to frameworks
Regulators openly acknowledged the operational strain caused by repeated regulatory rewrites. The direction of travel is now toward future-proof frameworks, supported by:
Ongoing post-implementation reviews
Technical working groups with industry participation
Clearer supervisory guidance, rather than constant RTS overhauls
For firms, this signals fewer “big bang” regulatory rewrites. However, it also means greater responsibility to design robust, flexible operating models that can support long-term derivatives reporting transformation without repeated re-engineering.
Timelines are crystallising (but preparation must start now)
While some reform timelines still feel distant, key signals from regulatory discussions suggest increasing clarity:
UK reform timelines are solidifying, with FCA policy statements expected in H2/H3, and firms likely needing to be ready by H1 2028
ESMA is expected to publish feedback to its Call for Evidence by Q1 2026, with final recommendations by mid-2026
EU-level agreement is anticipated by the end of the year, followed by phased or structured implementation
The message from regulators was consistent: Derivatives reporting transformation cannot wait for final rules. Operational readiness must begin well in advance.
Digitisation is no longer theoretical
Machine-readable regulation, digital rulebooks, and standardised interpretation tools are now firmly on the regulatory agenda. The intent is clear:
Reduce ambiguity
Improve data quality
Enable automation and scalability
As part of the broader derivatives reporting transformation, technologies such as digital reporting rules, structured interpretations, and AI-driven controls are increasingly viewed as foundational capabilities, not experimental add-ons.
Simplification does not mean deregulation
A recurring theme was that simplification is about better quality, not fewer obligations:
Certain data points may be removed, but supervisory expectations around accuracy will increase
Regulators are prioritising consistency, traceability, and explainability
Poor reporting quality will become harder to justify in a simplified regime
This phase of derivatives reporting transformation is therefore about raising standards, not lowering the bar.
Divergence is real, and here to stay
Regulatory divergence between the UK and EU was explicitly acknowledged:
Alignment is not the primary objective
Firms should plan for divergence, not assume convergence
Divergence materially increases cost without the right operating model
For firms undergoing derivatives reporting transformation, this reinforces the need for a holistic, cross-regime reporting architecture, where common data, controls, and assurance processes are reused wherever possible.
Persistent complexity: back reporting, records, and lifecycle events
Several long-standing practical challenges remain unresolved, including:
Back reporting versus record-keeping obligations
Treatment of expired versus open trades under EMIR and SFTR
Cancellation and re-submission requirements under MiFID
Block versus fill reporting inconsistencies
Single-sided reporting complexity and PII handling
Addressing these issues is a critical and often underestimated part of successful derivatives reporting transformation.
Supervisory technology is the next frontier
There was growing consensus that the industry must move beyond “reporting pipes” and toward supervisory technology, including:
Embedded controls
Continuous reconciliation and assurance
AI-driven exception management
Explainable audit trails aligned to regulatory intent
This evolution is a core pillar of derivatives reporting transformation and will be essential if regulators are to achieve their stated goal of 25–35% cost reduction across the industry.
What firms should be doing now
Based on regulator feedback and industry discussion, firms should be focusing on:
Designing flexible, regulation-agnostic reporting models
Investing in digitisation, automation, and AI-enabled controls
Reducing silos across EMIR, MiFIR, SFTR, and future regimes
Actively engaging with trade associations and regulatory forums
Treating derivatives reporting transformation as a continuous process, not a one-off project
How Reg-X Innovations fits into this future
At Reg-X Innovations, this direction of travel strongly reinforces our long-held view of what effective derivatives reporting transformation requires:
Reporting, assurance, accuracy, completeness, analytics, and record-keeping must live on a single integrated platform
Controls and oversight must be embedded, automated, and explainable
Firms need one operating model that works across regimes, jurisdictions, and future reforms
As regulatory change accelerates, technology that simplifies, standardises, and scales is no longer optional; it is essential.
Final takeaway
Derivatives reporting transformation is ultimately about simplification through digitisation.
While there may be short-term disruption, the long-term objective is clear: greater stability, higher data quality, and materially lower cost. Firms that invest early in modern, intelligent reporting infrastructure will be best placed not just to comply, but to operate with confidence in an increasingly complex regulatory world.
