Abstract

The European Market Infrastructure Regulation (EMIR), adopted in 2012, was the first EU framework to introduce a two-sided transaction-level reporting obligation. Under EMIR, both counterparties to a derivatives contract – financial and non-financial– must report the transaction details to a trade repository. Similarly, the 2015 Securities Financing Transactions Regulation (SFTR) extended this approach to securities financing transactions such as repos and securities lending.
EMIR and SFTR promote market standardization through the requirement to use common identifiers like LEIs, ISINs, UPIs, and UTIs, improving data quality and integration with other datasets. By requiring both counterparties to report the same transaction, they marked a decisive step forward in EU market transparency and established a reporting paradigm that goes beyond the mere collection of data.
Double-sided reporting offers several advantages for financial market supervision and data quality. Because both counterparties report the same transaction, authorities can cross-check submissions, enabling early detection of inconsistencies, errors, and anomalies at an early stage. This built-in reconciliation makes manipulation or under-reporting more difficult, as discrepancies quickly become visible. It also encourages standardization and coordination between counterparties. Reflecting these benefits, the European Central Bank adopted a two-sided approach for the Money Market Statistical Reporting, which underpins the calculation of the €STR.
An additional advantage is that supervisors are able to evaluate exposures from the perspective of each counterparty. This is particularly relevant in the EU’s multijurisdictional supervisory framework, where macroprudential policy remains largely a national competence. In a one-sided reporting system, authorities may need to rely on data collected and validated by a foreign authority, limiting their ability to sanction misreporting.
Critics argue that two-sided reporting is more resource-intensive for reporting entities and authorities. However, this overlooks challenges inherent in one-sided systems, where participants must continually determine reporting responsibility. Moreover, one-sided reporting eliminates the possibility of cross-validation, reducing data reliability. Experience with EMIR, SFTR and MMSR shows that two-sided reporting is crucial for ensuring high-quality transaction-level data.
We illustrate the role of dual-sided reporting in improving the analytical possibilities, with an application to the European repo market based on regulatory data collected via the SFTR regulation. In addition, we also assess the quality of the SFTR data by comparing it with other data sets available such as public disclosures of CCPs or supervisory data for banks.
Given its central role in enhancing data accuracy and transparency, dual-sided reporting should remain a key consideration in ongoing EU discussions on simplifying regulatory reporting.