2025 Regulatory Reporting Trends and Insights
With regulatory reporting changes continuing at full speed in 2025, the importance of understanding the full implications is crucial for effective decision making. With changes such as SEC 10c-1a, CSA and HKMA rewrites, we asked a group of leading industry professionals to share their perspectives and insights into the challenges the industry faces as regulators focus on operational processes and improved data quality.
Disclaimer: Statements by persons who are not S&P Global Market Intelligence employees represent their own views and opinions and are not necessarily the views of S&P Global Market Intelligence
# 1 – ISDA’s Commitment to Digital Regulatory Reporting
Andrew Bayley, Senior Director, Data and Reporting, International Swaps and Derivatives Association
It was a year of election fever, geopolitical tensions and Olympic drama, but 2024 will also be remembered for the non-stop rollout of derivatives regulatory reporting rules, with updates implemented in Japan, the EU, the UK, Australia and Singapore.
This succession of reporting deadlines over a seven-month period between April and October was certainly challenging, and the pace won’t let up next year. The second phase of Japan’s rules will come into effect in April, followed by Canada in July and Hong Kong in September. Regulators have indicated they have higher expectations of data quality and completeness than they might have had in the past, raising the spectre of penalties for inaccurate reporting. As time goes on, it is less likely that there will be any forbearance for firms that make mistakes in their reporting.
At ISDA, we’ve seen increasing interest in our Digital Regulatory Reporting (DRR) initiative as this year of reporting rewrites has progressed. Using the Common Domain Model, a free-to-use data standard for financial products, trades and lifecycle events, the DRR converts an industry-agreed interpretation of reporting rules into unambiguous, machine-executable code. Firms are using the ISDA DRR either as the basis of their implementation of the reporting rules or to validate that an independent interpretation is in line with the industry consensus. In either scenario, it is giving market participants greater confidence that they are reporting accurately, reducing the risk of regulatory penalties and allowing precious resources to be redeployed elsewhere.
As we prepare for 2025, the DRR will remain central to ISDA’s work on trade reporting. In total, we have committed to support 11 reporting rule sets in nine jurisdictions. That doesn’t mean we deliver the DRR code and then walk away. We’ll continue to adapt the code as the rules evolve in future, which means DRR users can seamlessly and efficiently implement any updates.
The challenge of trade reporting won’t be going away anytime soon, but the ISDA DRR offers a way to effectively overcome that challenge.
#2 – Focus on Data Quality, Governance and Control
Marcus Threadgold, Partner, KPMG Advisory (London) Limited
It’s been a big year for the industry with the plethora of Derivative re-writes going live and firms continuing to work through remediation activities. In 2024 the supervisory focus on data quality has been very clear and re-enforced through many of the regulatory communications including, but not limited to, ESMA Data Quality report and FCA Market Watch publications. Despite some general improvements in reported data across EMIR, SFTR and MiFID, challenges remain for firms such as inconsistency across obligations and quality issues on CDEs. It’s therefore no surprise that firms continue to evolve and invest in the governance and control environment to ensure data is complete, accurate and timely. Independent governance and control reviews including high quality front to back data testing are common solutions.
Looking ahead, the next wave of regulatory consultations are in session with ESMA releasing its latest MiFID consultation focused on RTS 22 transaction reporting changes. Whilst ESMA is still seeking feedback on proposed amendments (deadline 3rd Jan 2025), there is impact across a variety of areas including: i) Additional fields (Effective Date, Entity subject to the reporting obligation) and ii) Reporting of transactions that are both non- TOTV and non UTOTV e.g. bespoke inflation swaps, total return swaps. In current form the proposed EU changes diverge from the FCA rulebook, however we await the imminent FCA discussion paper on MiFID. Given the potential scale of changes early impact assessment and effective change management are important priorities for firms as we head into 2025.
# 3 – U.S. Enforcement of Swap and SBS Reporting Violations: Why New Agency Leadership May Present Reason for Reporting Counterparty Optimism in 2025
Ryan Hayden, Of Counsel, Steptoe LLP
Market participants closely followed CFTC Enforcement actions this year, with higher penalties promised for both “recidivists” and swap reporting violations, among other policy adjustments announced in an October 2023 enforcement advisory (the “Advisory”) and subsequent statements from CFTC leadership. [1] Foreshadowing the Advisory, the CFTC levied its highest swap reporting fines on record at the end of FY 2023, fining one swap dealer $15M for Parts 43 and 45 reporting violations. The actions were met with skepticism within the Commission itself, with one CFTC Commissioner issuing a statement criticizing the size of swap reporting violations, describing them as “excessively and disproportionately punitive”. [2]
But despite the ominous outlook for 2024, trade reporting violations have been relatively modest compared to last year’s output, and more in line with pre-2023 actions. To date, the CFTC has settled five enforcement actions involving swap reporting violations in calendar year 2024, totaling approximately $11.5 million in fines. Those actions were brought against U.S. and non-U.S. Swap Dealers and two Swap Execution Facilities. The actions reflect the Commission’s pursuit of the entirety of the swap reporting rulebook, and included penalties for violations involving real-time, SDR, life-cycle and valuation reporting. Although some fines were still high (for example, $1.25M for a non-U.S. SD entering its first trade reporting settlement), they also show an agency more receptive to providing cooperation credit for self-reporting and disclosure.
Perhaps the most significant change from the CFTC Enforcement Division (“Enforcement”) is its approach in pursuing enforcement actions. CFTC registrants now have their NFA exam reports comprehensively researched (or, in the words of one CFTC Commissioner, “mined”)[3] by Enforcement to bring increased penalties, and in pursuit of additional violations. Armed with years of NFA exam results, findings, and annual compliance reports that mandate disclosure of actions taken to remediate non-compliance issues, registrants can expect Enforcement to focus on delayed or prolonged remediation efforts to underscore insufficient supervisory systems and ultimately increase fine amounts. [4]
True to the Advisory’s promise to subject “recidivists” to higher penalties, Enforcement settled two separate actions involving the violation of previous cease and desist orders in 2024.
More than a decade into swap reporting requirements, and with over 30 total swap reporting-related settlements, many market participants are at heightened risk for having this additional charge brought – highlighting the need for reporting parties to fully (and timely) remediate trade reporting programs.
The fate of highly scrutinized swap reporting in the U.S. hinges on who will become the next CFTC Chair in the wake of the Presidential election. But there is reason to believe that Enforcement may alleviate its pressures on swap reporting violations under new leadership. In addition to concerns with pursuing trade reporting violations that do not involve customer harm, financial losses or misconduct,[5] another Republican Commissioner would like to provide self-reporting and cooperation credit to firms that self-disclose non-compliance issues to non-Enforcement divisions within the CFTC, such as the Division of Market Oversight (DMO). [6] This is welcomed news for reporting counterparties, who could self-report technical reporting infractions while mitigating the risk of a potential enforcement action. It remains to be seen whether firms would be eligible for cooperation credit where satisfying mandatory notification requirements.[7]
Not to be forgotten, the SEC began to scrutinize security-based swap (SBS) reporting efforts of registered security-based swap dealers (SBSD) in 2024. The SEC issued a risk alert in early 2024 that identified a number of SBS reporting deficiencies, including inaccurate and untimely submissions observed in SBSD exams. While the SEC has not settled an SBS reporting violation yet, we expect this to change as the SEC continues their examinations of SBSDs, who remain relatively new additions to the registrant landscape.
Finally, new SEC leadership may take a closer look at the proposed SBS large trader reporting rule. Industry has generally opposed the proposal, citing its belief that the agency has interpreted its statutory authority too broadly. Under new leadership, the SEC could rework the proposal to impose reporting requirements only on positions necessary to enforce position limits, and could take the view that positions need not be publicly disseminated.
#4 – Consulting Trends in 2025
Andrew Seymour, Managing Director, Head of Advisory Services, CubeMatch
The regulatory landscape is becoming increasingly intricate as jurisdictions introduce stricter rules and unique nuances to existing regulations. This rising complexity contributes to the global compliance framework. Navigating these changes proves challenging, highlighting the crucial role of Regulatory Technology (RegTech) in fulfilling compliance demands, especially with multiple deadlines approaching in 2025. As regulations continuously evolve, businesses must vigilantly monitor their compliance processes. Consequently, financial institutions will likely seek assistance from RegTech firms to efficiently manage regulatory requirements through automation, thereby improving data management and reporting.
With the growing demand for RegTech, there is an increasing need for consulting services. The changes to EMIR and the UK EMIR Refit in 2024 and strong demand in 2025 reflect this trend. Recent regulatory updates like MiFID, Section 10C-1a, JFSA, ASIC, MAS, CFTC and HKMA are expected to drive demand for advisory services targeted at small and medium-sized enterprises (SMEs). Additionally, institutions will likely reassess their current Operations and Control processes.
Given the anticipated ongoing budget constraints for Financial Institutions, we foresee a heightened demand for a flexible, cost-effective consulting approach. This method will allow for the delivery of a clear project plan in weeks instead of months, with small, agile teams successfully completing projects within three to four months.
Opting for RegTech solutions over delegated reporting models involves balancing competitive advantages with collaborative efforts. Some aspects of regulatory compliance are unique to each institution, necessitating customized solutions for a competitive edge. Collaboratively developed solutions often prove more effective for shared issues, utilizing collective insights and a deep understanding of regulatory needs. Collaborating with external consultancies and RegTech vendors frequently yields better results than relying solely on in-house solutions. External vendors offer valuable industry insights, drawing from their experience with various regulatory challenges, and focus on RegTech solutions that are scalable, adaptable, and up to date with regulatory changes.
Partnering with RegTech vendors and industry forums presents opportunities for insights into best practices and trends and access to specialized expertise. Financial institutions that adopt RegTech will be better positioned to respond to evolving customer demands and maintain competitiveness within the rapidly changing regulatory reporting landscape. Furthermore, leveraging RegTech allows these institutions to cut compliance costs, save time, and strengthen their overall compliance frameworks.
#5 – CSA Rewrite
Chris Owers, Practice Director – Global Head of Regulatory Compliance Solutions, First Derivative
On July 25, 2024, the Canadian Securities Administrators (CSA) announced final amendments to the over-the-counter (OTC) derivatives trade reporting rules, set to take effect on July 25, 2025. These changes align Canada’s rules with international standards, particularly those from CFTC and ESMA. The aim is to improve data quality, streamline cross-border reporting, and increase compliance transparency.
Key amendments include:
• Unique Product Identifier (UPI): Standardized product taxonomy across asset classes.
• Non-dealer Reporting: Shift to T+2 for creation and lifecycle data, in line with CFTC.
• Expanded Reporting Fields: Over 70 new reportable fields, in line with global Critical Data Elements (CDEs).
• Unique Transaction Identifier (UTI): Harmonized rules for UTI assignment and transmission.
• Collateral & Margin Reporting: Enhanced disclosure requirements.
• Position Level Reporting: Expanded to include CFDs and commodity derivatives.
• Lifecycle Event Reporting: More detailed action/event types for reporting.
• Data Validation: Improved verification processes and tighter correction timelines.
Additionally, the CSA has created a Derivatives Data Technical Manual to guide market participants on how to comply with the new rules. While the amendments don’t yet require ISO 20022, the CSA intends to adopt this format in the future, in line with global practices.
Business Conduct Rules:
Following a decade-long consultation, on September 28, 2023, the CSA introduced final Business Conduct Rules aimed at improving the safety and transparency of the derivatives market in Canada. These rules, effective September 28, 2024, establish a comprehensive framework for business conduct in the OTC derivatives market. Transition Period: Firms have until September 28, 2029 to amend contracts and adjust to the new requirements.
Key provisions include:
• Core Obligations: Firms must act fairly, disclose conflicts of interest, ensure proper client information, and implement systems to comply with securities laws.
• Additional Protections for Non-Eligible Derivatives Parties (Non-EDPs): Includes suitability assessments, pre-transaction disclosures, and clear transaction details.
The rules differentiate between Eligible Derivatives Parties (EDPs) and Non-EDPs, with additional protections for non-EDPs. The concept of EDP aligns with the “eligible contract participant” designation in U.S. law, acknowledging that some sophisticated parties may not require the same level of protection. This new regime aims to enhance investor protection and market confidence, contributing to the stability of Canada’s financial system.
These reforms represent a significant shift toward greater regulatory oversight in the derivatives market, aligning with global standards and ensuring a more transparent, fair, and secure trading environment.
#6 – SEC 10c-1a update: Window of compliance shortened
Tom Veneziano, Director, Head of North America Product, Pirum
The SEC recently announced that it has postponed its approval or disapproval of the FINRA SLATE rules. The industry will need to wait until the next update – scheduled for January 2nd, 2025 – to gain more clarity on the 10c-1a requirements. Per the existing rule and as go-live is still set for 2026, the window for establishing compliance has been shortened.
We urge firms to engage and start their planning now in anticipation of the final rules.
By leveraging our successful and widely adopted SFTR reporting solution in collaboration with S&P Global Market Intelligence Cappitech, we are moving full steam ahead but continue to work closely with our clients and remain ready to pivot our product build for any changes that might be announced during this shortened window.
Our ability to extend the existing regulatory reporting solution, built for the even more complex SFTR requirements, means that we are optimally positioned to provide a streamlined 10c-1a reporting solution, with the smallest lift and quickest time to market.
# 7 – Buy-side and sell-side looking for alternatives to inhouse reporting
Tobias Heinke, Senior Manager Banking & Capital Market, Bearingpoint
Both buy-side and sell-side participants are often faced with complex and burdensome reporting requirements. They are looking for simplifications to reduce costs and administrative burdens. There is a growing awareness of replacing in-house developments with standard software solutions available on the market. We are also seeing an increasing willingness to outsource reporting obligations to (clearing) brokers and other third parties or intermediaries. Inconsistencies in data formats between different reporting regimes can be a major challenge. Standardization would improve efficiency and reduce errors. In addition, better data quality is essential for accurate risk management and will be closely monitored by regulators. This requires improvements in data collection, validation and reporting to reduce the risk of misconduct. In addition, various reporting regimes are expected to come into force in 2025, such as the MiFIR review or the CSA rewrite. Finally, the adoption of new technologies, such as AI and machine learning, could streamline reporting processes and enable more advanced analytics. Both buy-side and sell-side participants will explore new use cases for AI.
#8 – Getting prepared for Hong Kong rewrite
I-Ping Soong, Capital Markets (SFD) Partner, Linklaters
The rewrite of Hong Kong’s mandatory trade reporting rules will come into force on 29 September 2025, giving reporting entities less than a year to prepare.
Key changes include:
• a unique trade identifier (“UTI”) and Unique Product Identifier (“UPI”) will be reportable for each reportable transaction;
• the number of reportable critical data elements (“CDE”) will be increased to 181;
• collateral reporting will be introduced;
• ISO 20022 XML message standard will be required.
While Hong Kong’s reporting reform is largely aligns with global standards, local nuances mean that a single reporting solution cannot be generated across multiple jurisdictions. For example, a number of CDEs are unique to Hong Kong and certain products (for example crypto asset derivatives) may be reportable in Hong Kong but not elsewhere.
Collateral reporting is new and generates a number of issues. Mandatory reporting rules are generally geared towards “simple” collateral arrangements, with a single initial margin (“IM”) document and variation margin (“VM”) document per ISDA and these are easily broken down into their components. In practice, collateral agreements may be more complex, involving cross-product netting or global netting, and margin may be combined with collateral for other products. Breaking collateral down into IM and VM can prove challenging, necessitating early legal involvement.
Live legacy transactions with a remaining maturity over one year must be reported in the new format within 6 months from the go-live date. However, amendments to a live legacy trade must be reported within two business days, which may present logistical issues for firms.
Critically, the entities that are subject to the reporting obligation are unchanged: these are authorized institutions (“AIs”) (banks), licensed corporations (“LCs”), approved money brokers (“AMB”), recognized clearing houses and ATS-CCPs (foreign clearing houses) if they are either (a) a party to an OTC derivative transaction or (b) (in the case of an AI, LC or AMB) have conducted the transaction in Hong Kong on behalf of an affiliate. Consequently, most buy side firms will not be directly subject to the mandatory reporting obligation.
However, buy side groups with an LC that executes trades for affiliates in the group that are not collective investment schemes may inadvertently fall within scope.
Experience in other jurisdictions has shown that significant time will be required for operational build and communication both internally and with external counterparties. Sufficient time for preparation is advised.
#9 – MAS rewrite key takeaways and what the industry can expect next
Anthony Xavier, Principal Consultant, Capital Markets, Payment Services, Bovill Newgate
2024 was an eventful year for financial supervision, especially so in the capital markets and payment services sectors in Singapore. Notable steps taken by the Monetary Authority of Singapore (MAS) to strengthen its regulatory regime and oversight include; the reading of the Financial Institutions (Miscellaneous Amendments) Bill, repeal of the regulatory regime for registered fund management companies, segregation and custody requirements for digital payment token (cryptocurrency) service providers, expansion of the Fair Dealing Guidelines to all financial institutions (FIs) and to all products offered, and of course the OTC Derivatives reporting rewrite (MAS rewrite) which took effect on 21 October 2024.
I would like to share my key takeaways from the MAS rewrite, gathered from working with clients, and what the industry can expect next. FIs may wish to adopt these good practices for future projects.
Key takeaways
Industry Engagement: There were a number of industry engagements, community roundtables, and webinars organized by industry associations, trusted service providers and the depository. These are useful forums where knowledge is shared, common issues discussed, and industry standards validated. FIs should make use of such industry engagement and support for future regulatory change projects.
Working Group: FIs should put together a Working Group (WG) and start the project early. The WG should minimally comprise of Business Control, Compliance, Operations and IT. Terms of reference might be useful so that everyone is clear on their roles and responsibilities. The WG should meet regularly and ensure key project milestones are being met. FIs should also engage counterparties early, in the case of the MAS rewrite to determine who is responsible for generating the Unique Transaction Identifier.
Business Requirement: Business Control and/or Compliance should hold the pen when drafting a Business Requirement Document (BRD). The BRD essentially informs a firm’s IT Developer (or external service provider) on what exactly needs to be done for the transaction reporting in an ‘easy to understand’ manner. This helps to minimize unnecessary mistakes at the development stages, and ensure that all stakeholders’ understanding of matters are aligned which will likely result in a favorable testing phase.
Professional support: Generally, the bigger inter-dealers, brokers and global asset managers have dedicated change management teams and IT developers to work on such regulatory change projects. However, smaller and mid-tier firms may not have such in-house expertise. Such firms are encouraged to seek support early from a trusted service provider(s) who can support the interpretation of rules and regulations, scope of reportable products and fields, XML coding, operations and project management.
What the industry can expect next
FIs need to continually ensure that their transaction reporting processes are robust and the data being reported is accurate and complete. We think that MAS may analyse and scrutinise reconciliation reports produced by the depository to better understand the steps taken by FIs to address any exceptions. In the short term, MAS may conduct surveys and engage FIs that have been identified as outliers. In the longer term, MAS may conduct thematic inspections to review FIs’ processes and controls. It is likely that MAS will take enforcement actions against firms that have blatantly breached regulatory requirements.
#10 – T+1 standard settlement cycle
Lakhbir Badeshia, Regulatory Change Lead, Crisil
The United Kingdom (U.K.) government and regulators have established an Accelerated Settlement Taskforce (Taskforce) which set out in its report published in March 2024 that said the UK should be committing fully to the T+1 standard settlement cycle and have this operational by the end of 2027. Whilst the 2027 date is the end point, the report did state that to help meet this date a number of operational changes (such as exchange of SSI, market standards on allocations and confirmation) should be initiated in 2025. The report also recommended that the UK work closely with the Europe to see if alignment can be reached to help drive standardization thereby helping the wider market. To that end industry participants need to start to understand the impacts of this regulation on their existing operations, processes, risk management and funding requirements so as to minimize impact on their operating model.
The good news is that learnings from the US and APAC regions (which have already implemented this across a number of products) can be leveraged to accelerate the analysis and development of robust solutions. The impacts are probably going to be more acute for the small to medium sized firms along with a greater potential challenge across the asset management industry. The overall challenges are likely to be greater across the EU/UK landscape than was felt at across the relatively uniform US market, as the EU/UK arena consists of multiple exchanges, clearing houses and regulatory jurisdictions. This latter fragmentation further complicates the solution definition approach. Therefore, there is clear opportunity to start this analysis early and help inform future requirements and solutions. We have started to engage with a number of clients that are looking to use the time available in 2024/2025 to start to mobilize work on understanding the requirements and the potential levels of change required across their operating models to meet the T+1 requirement when it lands. They are also looking to help identify elements to bring to the industries attention to help inform future standards where appropriate.
# 11 – Buy vs. Build: The future of regulatory reporting post EMIR REFIT
Johannes Brenner, Managing Director, Nelijae Consulting GmbH
The regulatory reporting landscape has been undergoing a significant transformation this year, with the preparation and go-live of EMIR REFIT serving as a critical juncture. Many affected institutions have taken a hard look at their reporting setups, sparking fresh debate over the age-old question: should you buy or build?
Bonus Trend – Is 2025 the year Brexit divergence with ESMA regulations finally hits regulatory reporting in a substantial way?
Struan Lloyd, Head of Cappitech at S&P Global Market Intelligence, Cappitech
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Disclaimer: Statements by persons who are not S&P Global Market Intelligence employees represent their own views and opinions and are not necessarily the views of S&P Global Market Intelligence
Footnotes to: # 3 –U.S. Enforcement of Swap and SBS Reporting Violations: Why New Agency Leadership May Present Reason for Reporting Counterparty Optimism in 2025 (and beyond)
[1] See “Remarks of Enforcement Director Ian McGinley at the New York University School of Law Program on Corporate Compliance and Enforcement: “The Right Touch: Updated Guidance on Penalties, Monitors, and Admissions” (Oct. 17, 2023), discussing the importance of deterring misconduct and citing “swap dealer reporting cases” as prime examples” of recurring issues where enforcement “penalties need to exceed the costs of compliance, to avoid the risk of institutions viewing penalties as an acceptable cost of doing business.”
[2] “As reflected in recent settlement orders, the CFTC changed its approach to swap data reporting cases in 2023 to be excessively and disproportionately punitive… .” See “Statement of Commissioner Caroline D. Pham on Swap Data Reporting Settlement Order and the Examination Process” (Oct. 1, 2024).
[3] “I am troubled that too many of our recent enforcement actions have “mined” NFA exam reports in order to penalize CFTC registrants with hefty penalties for operational or technical issues that do not have any misconduct, harm to clients, or financial losses… .” Id.
[4] See CFTC Docket No. 24-18 (Aug. 26, 2024), finding that one swap dealer’s “repeated swap data reporting violations over several years” demonstrated a “generally inadequate” supervisory system and a failure to perform supervisory duties diligently (with respect to swap data reporting obligations).
[5] Id.
[6] See “Remarks of Commissioner Summer K. Mersinger at ISDA’s Annual Legal Forum: Rethinking Enforcement” (Oct. 30, 2024), stating that limiting self-reporting credit to “disclosures [made] directly to the Division of Enforcement is to elevate form over substance” and that disclosing a matter of non-compliance to an oversight division “serves the agency’s interests by enabling that division to work with the company on compliance on a going-forward basis…” while allowing the division to refer the matter to Enforcement “where appropriate.”
[7] See, for example, § 17 C.F.R. 45.14(a)(1)(ii), requiring swap reporting counterparties and reporting CFTC-registered exchanges to notify DMO in the event swap reporting errors will not be timely corrected.
