If you asked regulatory reporting professionals in 2025 what they required from 2026, the answer was uniform: stability.
First published in Finextra, 28 January 2026
Following the marathon of the EMIR Refit, the CFTC Rewrite, and the JFSA updates, there was a common hope that the industry had earned a quiet period to maintain and embed systems, and pay down ‘technical debt’.
However, leaving J.P. Morgan’s London offices this week after attending the International Swaps and Derivatives Association’s (ISDA) event The Next Wave in Derivatives Reporting: Regulation, Simplification, and Technology, it is evident that stability is not on the agenda.
The narrative has shifted. For two years, the industry focused on harmonisation, with regulators ostensibly working to align data fields like the UPI and UTI globally. The theme emerging for 2026 however, is not one of stability but one of divergence.
Regulators in the UK and EU are both discussing simplification, yet they are pursuing it in incompatible ways. For global firms, the era of copy-paste compliance is over. The only way to survive this next wave without increasing headcount and budget, is to stop hard-coding rules and start digitising them.
From stasis to architectural separation
The mood in the room at the ISDA event was instructive. We are not entering a period of stasis, we are entering a period of architectural separation.
At the event the FCA’s approach was described as a radical change designed to reduce the regulatory burden. These are more than minor adjustments. The UK regulator is actively reducing the number of fields. Participants highlighted that fields like 'Price Type' are under review because market convention already dictates them, rendering their presence in regulation redundant. More significantly, there is a push to remove FX derivatives from reporting entirely.
This deregulation sounds positive in isolation. Who would argue against fewer fields?
The difficulty emerges when we examine the European context. The EU is reevaluating reporting to reduce costs, but their streamlining takes a different form. Europe is leaning towards "Option 1a," which focuses on fixing the overlap between OTC and ETD reporting, ensuring EMIR covers only OTC derivatives while MiFID handles the listed side.
The UK and EU share high-level objectives, but their regulatory architecture is becoming fundamentally different.
For a domestic UK firm, the FCA’s changes are beneficial. For global banks like J.P. Morgan or BNP Paribas, this divergence is a data management maze. You cannot simplify a global system if the UK wishes to remove fields that the EU still requires, or if the definitions of a reportable product drift apart. Global harmonisation is critical for these firms, yet the rulebooks are separating.
The legacy method is brittle
We spent the last decade building reporting engines on the assumption that we could patch differences between jurisdictions. If the FCA changed a rule, we added conditional logic to the code.
That method is far too brittle for 2026.
Cracks are already visible. During the panel on UK MiFID Transaction Reporting, the debate over identifiers took priority. The divergence in the use of modified ISINs versus the UPI is causing operational friction. When one jurisdiction shifts while another remains static, the cost is in implementation, but also in remediation. As noted during the session, the real cost hits when things go wrong. Fixing breaks and back-reporting is where the budget is burned.
Solving a structural divergence problem with a manual coding solution is impractical if not impossible. If the UK rulebook differs entirely from the EU rulebook, maintaining two separate logic streams manually is unsustainable. It breaks the concept of a global data model. We require a mechanism that absorbs these changes without requiring a full system rebuild every time a regulator publishes a consultation paper.
The solution: The digital printer
The conversation at the conference pivoted from problems to a potential solution - Digital Regulatory Reporting (DRR).
In discussions DRR was described using a "digital printer” analogy.
In the legacy model, every bank built its own printer driver from scratch. If the regulation (paper size) changed, everyone would have to rewrite their driver. In the DRR model, the industry builds the printer driver (the code and logic) together as a shared, open-source standard. Individual firms then simply provide the ink and the paper (their internal data).
If the FCA decides to remove the 'Price Type' field, the DRR model is updated centrally to reflect that logic. The driver updates. If the EU tweaks the definition of an OTC derivative under Option 1a, the DRR logic adapts.
Because the rules are digitised and shared, firms avoid interpreting legal text in isolation and hard-coding it into legacy systems. Moger noted that using DRR has already reduced testing time and provided developers with unprecedented visibility into the end-to-end process.
At TradeHeader, we are prioritising this shift. As shared with the panel, we are expanding DRR support to cover SFTR (Securities Financing) and MiFID this year, alongside finishing our SEC testing. This transforms DRR from a niche tool for swaps into a universal solution for transaction reporting.
From compliance to innovation
The most significant takeaway from the event was not cost reduction but actually a shift in mindset.
Some firms are moving beyond implementing DRR for compliance and are examining how to innovate on top of it. They are working with bodies like ISLA (International Securities Lending Association) to expand support for Securities Lending, effectively turning a compliance obligation into a data strategy.
Even regulators acknowledge that technology must lead. Research is underway into using AI to translate rules directly into DRR code. We are moving toward a future where the gap between a written regulation and executable code is negligible.
The strategy for 2026
If you are waiting for a mandate to adopt digital reporting, you are already behind. The divergence between UK and EU frameworks will make manual maintenance prohibitively expensive.
The time for observation is over. The value now lies in training and Proofs of Concept (POCs). Firms must validate internally that a Common Domain Model (CDM) can handle its specific trade flows.
2026 is not the year of stability. It is the year of the split. The only way to manage this gap is to ensure your reporting logic is not trapped in a silo, but part of a global, digital standard.
