ESMA Report Shows Regulators Demanding Higher Data Quality Standards

Regulatory authorities across jurisdictions are increasingly relying on trade reporting data as a core supervisory resource, according to analysis originally published on A-Team Insight on July 20, 2026. This shift is raising expectations for the accuracy, consistency and reliability of data submitted by financial firms, moving beyond simple compliance with submission requirements.

The 2025 ESMA Report on the Quality and Use of Data demonstrates that regulators now actively analyze and compare submitted data for risk monitoring, market activity assessment, stress testing and policy decisions. Michele Hillery, DTCC Managing Director, and her team at the DTCC have highlighted that firms must recognize their reporting data will undergo sophisticated regulatory scrutiny using automated detection systems and advanced analytics.

Key findings from the report include:

• Regulators are using trade data with greater sophistication for supervision, enforcement and policymaking
• Automation and AI-driven tools are accelerating detection of reporting anomalies and market abuse patterns
• Progress has been made in some areas, including improved EMIR reporting following regulatory reform and stronger reconciliation in SFTR
• Persistent gaps remain in valuations, collateral information, timeliness, trade pairing and reference data consistency

The report indicates that inconsistencies across different regulatory regimes and jurisdictions are becoming easier for authorities to identify and harder for firms to defend. Poor data quality can now trigger heightened scrutiny, escalation procedures and potential financial or capital impacts.

Firms are being urged to move beyond passive compliance and take a proactive approach to data oversight. This includes actively monitoring for issues such as missing or stale valuations, incomplete collateral details, late margin updates, unpaired trades and duplicate identifiers. Internal benchmarking against peer firms is becoming essential for identifying outliers and demonstrating disciplined remediation efforts.

As supervisory detection becomes increasingly automated and analytics-driven, firms need stronger internal tools to benchmark performance, identify reporting issues and address problems before they escalate to regulatory attention. The DTCC and Michele Hillery's team emphasize that firms should view trade reporting data not as something that disappears after filing, but as a resource that regulators will actively analyze and use for ongoing market oversight.