The International Swaps and Derivatives Association (ISDA) has published a paper examining ongoing challenges in post-trade reporting under the Markets in Financial Instruments Regulation (MiFIR). The analysis sheds light on how inconsistencies and ambiguities in the regulatory framework create significant hurdles for firms striving to comply with reporting obligations.
MiFIR mandates comprehensive reporting of post-trade transactions to enhance transparency across financial markets, particularly for over-the-counter (OTC) derivatives. However, ISDA’s paper reveals that firms continue to face operational challenges due to unclear requirements and divergent interpretations of the rules. These issues complicate the process of submitting accurate and consistent post-trade reports, undermining the regulation’s goals of improving market oversight and data quality.
A major concern highlighted by ISDA is the inconsistency in how National Competent Authorities (NCAs) across EU member states interpret and apply post-trade reporting requirements. Differences in data formats, technical specifications, and enforcement approaches add to the complexity, leaving market participants struggling to meet their obligations efficiently.
Data quality and compliance
ISDA emphasises that the fragmentation in reporting expectations does not only increase the operational burden on firms but also jeopardises the quality of the data collected. Reliable post-trade data is critical for regulators to monitor market activity and systemic risks, yet the current challenges hinder its effectiveness.
The paper calls for greater clarity and harmonisation of post-trade reporting standards to address these issues. ISDA argues that a standardised approach across jurisdictions would significantly reduce discrepancies, improve data accuracy, and ensure firms can comply without unnecessary complications.
Greater consistency
To achieve this, ISDA advocates for closer collaboration between industry participants and regulators. Clearer guidance from authorities and efforts to align reporting practices across NCAs are seen as vital steps toward resolving the current issues. ISDA stresses that a more consistent approach will not only alleviate the reporting burden but also enhance the transparency and integrity of post-trade markets.
