Derivatives Market Regulatory Compliance in 2025: Key Trends and Changes

As we look ahead to 2025, the derivatives market is set to experience another pivotal year of regulatory transformation. 

Regulatory compliance is no longer a ‘one-and-done’ project. It has become a continuous journey of adaptation, technology development and adoption, and strategic thinking. Regulatory reporting compliance is now a dynamic landscape that demands both technological sophistication and human expertise.

Staying on top of these changes is a key part of the challenge, so we’ve looked ahead to 2025, to share what’s coming for heads of compliance -  but first, we look at some of the wider themes that might impact their roles.

Ongoing adoption of Digital Regulatory Reporting (DRR)

Smart firms will be looking to improve accuracy and timeliness in compliance submissions, and looking to regulatory reporting tools that can help them achieve these critical goals in an ever-changing regulatory landscape.  

The Digital Regulatory Reporting (DDR) initiative from the International Swaps and Derivatives Association (ISDA) isn't simply another regulatory tool – it's potentially a game-changer. It not only provides a common interpretation of the dense rulebook, by transforming complex regulatory amendments into machine-readable code, DRR is set to revolutionise how firms approach compliance. Smart organisations are already either fully implementing DRR or using it as a validation framework for their existing processes.

Artificial Intelligence: A Cautious Revolution

Artificial intelligence is a trend that's impossible to ignore. In 2025, we'll see firms carefully exploring how AI can streamline their regulatory reporting workflows. The key word here is: ‘carefully’. 

Firms will look to AI to improve the efficiency of existing reporting processes, especially the ones that require lineage between the legal documentation and the reporting data.  

AI will continue to develop at the dizzying pace we have seen in 2024, and its efficacy and reliability in automating processes will be examined in more depth.  But given that accuracy is of paramount importance in regulatory compliance, we expect the industry will proceed with caution.

Tokenisation and smart contract development

The anticipated leadership changes in the United States are widely expected to accelerate the development of cryptocurrencies and digital assets. Critical questions remain about regulatory classification, jurisdictional oversight, and reporting requirements. 

In any event, we expect 2025 will see an expansion of tokenisation and a ramp-up in the development of smart contracts in our industry, even though it is still unclear what the impact will be on regulation.

Canada

The Canadian Securities Administrators (CSA) Rewrite, launching on 25th July 2025, transforms derivatives reporting by introducing over 70 new data fields, new global identifiers (Unique Product Identifiers (UPIs) and Unique Transaction Identifiers (UTIs)), and enhanced reporting protocols. Aligned with international standards from CFTC and ESMA, the changes mandate improved data validation, position-level reporting, and more rigorous error correction mechanisms. The update aims to enhance market transparency, regulatory oversight, and cross-border transaction efficiency.

Hong Kong

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) will implement new over-the-counter (OTC) derivatives reporting rules on September 29, 2025. Key changes include mandating the use of UTIs and UPIs; the reporting of Critical Data Elements (CDE); adoption of the ISO 20022 XML message standard by the Hong Kong Trade Repository; and, refinement of certain data elements from mandatory to optional reporting based on industry feedback.

United States

In 2025, the Commodity Futures Trading Commission (CFTC) plans to enhance derivatives reporting by implementing UPIs for commodities, expected mid-year. It will extend reporting relief for non-US swap dealers until December 1, 2025, and introduce 49 new data elements for Parts 43 and 45 swaps reporting. The focus will remain on improving data quality and aligning with international reporting standards in the derivatives market.

The SEC plans to continue examining security-based swap dealers and may begin examining security-based swap execution facilities. New disclosure requirements for public companies include filing insider trading policies as an exhibit to Form 10-K. The Securities and Exchange Commission (SEC) Division of Examinations will focus on broker-dealers' Regulation Best Interest practices, complex products, and automated tools. Large entities face a December 2025 compliance date for new requirements, while smaller entities have until June 2026.

Switzerland

2025 will see FINMA implement key changes to derivatives reporting in Switzerland, including the new FINMA Circular 2025/3 "Liquidity - insurers," which came into effect on 1 January 2025, and enhances liquidity management supervision. Additionally, five new ordinances implementing final Basel III standards will take effect on the same date, introducing new rules for market risk calculation and disclosure obligations for banks and securities firms. The revised Financial Market Infrastructure Act (FinMIA) is also expected to be finalised in 2025.

United Kingdom

UK regulators will implement significant changes to derivatives reporting (the Derivatives Trading Obligation (DTO)) in 2025. The FCA and Bank of England's revised UK EMIR reporting regime, which was effective from September 30, 2024, requires all new and modified derivative trades to comply with new requirements. Existing trades must be updated by March 31, 2025. The changes include 204 reportable fields and align with global standards. Additionally, the FCA, Bank of England, and PRA will introduce new rules for critical third parties in the financial sector, effective January 1, 2025, to enhance operational resilience.

EU

In 2025, EU regulators will continue implementing changes to derivatives reporting under EMIR REFIT. ESMA oversees these changes, which began on April 29, 2024. By October 26, 2024, all outstanding derivatives reports had to be updated to comply with new requirements. The number of reportable fields has increased from 129 to 203, enhancing data quality and standardisation. New ESMA guidelines aim to improve reporting harmonization across the EU. Financial counterparties must establish arrangements for non-financial counterparties below clearing thresholds to review data before submission. The Designated Publishing Entity regime for post-trade transparency under MiFIR becomes fully operational on February 3, 2025. Additionally, the Capital Requirements Regulation 2 Internal Models Approach reporting requirements for market risk will be applicable from November 15, 2025, for banks opting to apply them.

Welcome to the ‘New Normal’

Regulatory change has now become the ‘new normal’ and while technology plays an increasingly critical role in regulatory reporting compliance, human expertise remains irreplaceable. 

Compliance teams must invest in continuous learning, leverage advanced reporting tools, and maintain deep domain knowledge. The rise of cloud-based services has also prompted increased focus on cybersecurity and operational resilience, exemplified by regulations like the EU's Digital Operational Resilience Act (DORA).

2025 will be another year to keep heads of compliance in the derivatives market on their toes.

Blessed are the agile.