ESMA has released its Report on Quality and Use of Data (Report) for 2024 which looked into data reported under regulations that are within EMSA’s remit. Although the Report covers data reported under EMIR, MiFIR and SFTR, there is emphasis on the outcomes of EMIR Refit since its implementation in April 2024 which impacted a large number of reporting counterparties and trade repositories. The Report also contains an overview of sanctions imposed by the National Competent Authorities (NCAs) on reporting obligations (which has not been considered in ESMA’s previous data reports).
Overall, ESMA’s findings confirmed that there was a significant level of improvement in data quality which has also been beneficial for the European regulators to use in order to fulfil their core mandates. In 2025 there will be a continuation of efforts to increase data quality by ESMA and the NCAs, with a focus on enhancing reconciliation rates.
The Report is the 5th edition of its kind and is set out in two parts. Part 1 explores how ESMA and other major stakeholders are using regulatory data relating to market and risk monitoring, industry specific assessments and data necessary for supervisory and policy work. Part 2 covers insights on the efforts and outcomes with respect to monitoring, assessment and data quality enhancement.
TRAction highlights the main issues and outcomes discussed in the Report below.
Summary of the Report
Part 1 – Key projects with significant data use
The first part of the Report confirms that there has been a clear increase in the use of data by the European regulatory authorities, particularly to support their day-to-day activities. (The regulatory authorities referred to include the national central banks, other European Supervisory Authorities (ESAs) and the European Commission.)
Specific projects and publications are discussed, including the:
- use of data to see emerging trends and risks at EU, national or industry level as well as the publicising of such trends;
- use of granular information for investigation of specific entities or events; and
- exchange of information between authorities to support certain projects given bilateral contracts or current regulatory requirements.
Although there is still room for improvement on data quality, it was noted that there also needs to be simplification and reduction of burden arising from reporting requirements. As a result, ESMA has enacted a proof-of-concept (PoC) on how MiFIR transaction data can be utilised to undertake the transparency and volume cap calculations. The PoC’s success has meant that ESMA will be able to discontinue the two data reporting flows around these calculations during the course of the year.
Part 2 – Key Data Quality Developments
The second part of the Report addresses the main achievements in relation to tools and technology used in supporting data quality. Key developments are:
- Project SHARE – ESMA’s data sharing platform called ‘Data Platform (EDP)’ was inaugurated in 2022. This platform is a large data and cloud- based solution allowing more permanent and efficient data computation. Since 2022, ESMA has been transferring all its datasets and analyses and tools to EDP. In 2024, EDP was allowed to be accessed by 30 European Economic Area NCAs and the 2 ESAs – with the main pillars of co-operation being data analytics and code sharing. Since EDP’s introduction, there has been 12 projects with their results available for collaboration focusing on key issues such as market abuse detection, ESG text mining, data quality and short selling data quality checks.
| Data Quality Indicator (DQI) | Results for: 31 May 2024 to 31 Dec 2024 |
|---|---|
| Number of outstanding trades (concerning counterparty level reported information) | From 33.91% ↓ To 20.5% |
| Number of outstanding positions (between to counterparties subject to double reporting) | From 55.16% ↓ To 22.17% |
| Outdated valuations | From approx. 31% ↓ To 16.19% |
| Blank/abnormal maturity dates (noting abnormal maturity for a derivative > 51 years) | From approx. 28% ↓ To approx. 11% |
| Missing valuations | From approx. 28% ↓ To 12.63% |
| Incorrect ‘Entity responsible for reporting’ | From approx. 42% ↓ To 1.36% |
- MiFIR data – the main findings were:
- In 2024, ESMA supervised 8 different data reporting service providers (DRSPs) and the total number of transactions for 2024 reached approximately 7.7 billion. Of this figure, 4 billion were attributable to approved reporting mechanisms’ (ARMs) reported transactions.
- In comparison to 2023, the transaction figures notably increased for both total transactions and ARMs transactions from 7 billion to 7.7 billion however, ARMs transaction reporting slightly decreased in 2024 (by 2.31%). Further, the table below highlights important statistics in ESMA’s analysis which indicates that there was a significant increase in trading activity in 2024 compared to 2023.
- The number of reject files and transactions by NCAs is low, showing high levels of compliance.
- The main data quality issues which were faced with approved publication arrangements (APAs) included the publication of deferred transactions, non-publication of data during certain periods, incomplete APA data on the websites of certain APAs and incorrect reporting of APA data to the FITRS system.
| Statistics | Results for: 2023 vs 2024 |
|---|---|
| Total MiFIR transactions | From 7 million ↓ To 7.7 million |
| ARMS-reported transactions | From 54.59% ↓ To 52.28% |
| Total number of files reported | From 1.15 million ↓ To 1.21 million |
| Average number of transactions per file | From 6,072 ↓ To 6,334 |
| Total number of trades made public by Approved Publication Arrangements (APAs) (showing a 94.1% growth and largely due to fractional share publication) | From approx. 237 million ↓ To approx. 460 million |
| Equity-like trades | Increased by 126% |
| Non-Equity like trades | Increased by 20% |
- SFTR data – The Report provided that the DQIs which were assessed for the SFTR regime showed “that the quality of the SFTR data has still large margins of improvement. ESMA expects that reporting entities increase the quality of their reported data significantly. The ongoing engagement between the NCAs and ESMA through the existing DQEF and NCAs follow-up activities are expected to bring further improvements.’’
- Sanctions – In 2024, a consolidated sanctions report was published by ESMA focusing on measures and sanctions issued by the EU Member States under the EU capital market sectoral acts within ESMA’s scope. The publication was based on the results for 2023, where over 970 administrative sanctions and measures were imposed by EU Member States – totalling more than EUR 71 million in value. The total value of administrative fines imposed amounted to
- €51,204, for contravening Article 26 – MiFIR; and
- €342,705, for contravening Article 9 – EMIR.
For more information on data quality, please see our articles here and here.
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