MiFIR

In April 2025, the European Securities and Markets Authority (ESMA) has published the fifth edition of its report on the quality and use of regulatory data.

ESMA’s sharpened focus on data quality means that compliance is no longer about just submitting data - it’s about submitting accurate and timely data.

Data Quality Indicators (DQIs) are metrics developed by ESMA to assess the accuracy, completeness, and consistency of reported derivatives data. In ESMA’s April 2025 report, they used these indicators to track entity reporting over time.

For MiFIR, rather than adopting the same approach and analysing reporting entities, ESMA considered the performance of Data Reporting Services Providers (DRSPs). This may be a result of meetings ESMA held with DRSPs over the past two years as they aim to improve performance in this area.

ESMA's Top Findings for MiFIR

Transaction Volumes are Rising - So Is Scrutiny

• MiFIR transaction volumes reached 7.7 billion in 2024, up from 7 billion in 2023.
• ARMs accounted for 52.45% of these, notably, despite the rise in volumes their shares of the volumes declines, indicating a trend away from ARMs
• Reporting counterparties must ensure scalability and accuracy in their systems to handle growing volumes without compromising data.

Our take: The shift away from ARMs towards direct reporting has accelerated during 2024-25. Across Europe, NCAs have shown increasing openness to direct reporting, with some authorities permitting it exclusively. In the UK, Qomply has observed a notable rise in firms moving away from ARMs in favour of reporting directly to the FCA.

While firms processing upwards of 5 million transactions annually are the most frequent candidates for this transition, we are also seeing smaller firms make the switch. For these firms, the move is often driven less by volume and more by dissatisfaction with ARM services. A common catalyst has been the imposition of punitive back-reporting fees, which has prompted many to seek a more controlled and cost-effective alternative.

APA Publication Activity Has Surged

• Improved from 55.16% to 22.17%.
• This tracks inconsistencies in reported outstanding between counterparties subject to double reporting.
• Indicates better alignment but still above acceptable thresholds.

Our Take: Again, as in the point above, we wondered if this too was due to bedding-in process and the discrepancies more related to a lack of preparedness of reporting entities and TRs.

Outdated Validations

• Trades made public by APAs nearly doubled, from 237 million in 2023 to 460 million in 2024 - driven largely by fractional share reporting.
• Equity-like trades rose by 126%, non-equity by 20%.
• Counterparties must ensure timely and complete trade publication, especially for new asset types like fractional shares.

Our take: The increase in APA publication appears to be driven by a product-type as opposed to anything else. This seems like a natural response to trending.

ARM File Submission Is Increasing - Validation Is Critical

• ESMA received 1.21 million files in 2024, with an average of 6,334 transactions per file.
• While rejection rates are generally low, specific validation rules and counterparty reporting logic errors still cause significant rejections in some jurisdictions.
• Counterparties are advised to review data validation logic and test against rules to reduce rejections.

Our take: Interestingly, ESMA’s discussion of accuracy is limited to validation rules and focuses solely on rejections triggered by validation logic. Qomply infers from the enforcement action section below that, while ESMA highlights rejections from ARMs, there is a broader story around data accuracy that remains unaddressed in the publication.

Enforcement on Reporting and Data Quality

As a measure to encourage greater compliance within ESMA’s Strategy 2023-2028, for the first time ESMA published consolidated sanctions report and provided an overview of this as part of the report.

ESMA shared that there were more than “970 administrative sanctions and measures were imposed in 2023 across EU Member States, totalling an aggregate value of more than EUR 71 million.” These fines are not specific to transaction reporting.

When looking specifically at MiFID transaction reporting, “in 2023, a total number of 11 measures and sanctions were imposed for infringement of Article 26 MiFIR from two Member States Bulgaria (7) and Iceland (4). “The aggregated value of the enforcement actions for MiFID in 2023 was EUR 51,204

For infringements of Article 9 EMIR, a total of seven administrative measures and sanctions were issued in 2023 in Ireland (2), Luxembourg (2), Italy (1), Finland (1) and Iceland (1). The aggregated value of the enforcement actions for EMIR in 2023 was EUR 342,705.

Our take: Enforcement activity in the EU around transaction reporting does send a clear signal. ESMA has been proactive in publishing data quality reviews, updated guidelines, and Q&A, and it could be argued that they are more committed than ever to ensuring reporting entities understand both the requirements and the expected data standards.

That said, the aggregate fines to date suggest a relatively light-touch approach, with penalties perhaps reserved for the most significant breaches or repeat offenders.

What is noteworthy is the recent enforcement of EMIR breaches by several NCAs. This demonstrates that reports are being reviewed and acted upon. ESMA has previously published insights into how reported data is used, and the choice to prioritise EMIR enforcement may indicate that these breaches were viewed as more severe than MiFIR breaches, or that NCAs are deliberately setting an example to discourage future EMIR non-compliance.