222. Five respondents who commented on the proposal that counterparties should agree on level of reporting made the following remarks: (i) it is not practical to agree bilaterally with all counterparties on the level of reporting; (ii) it would be preferable for ESMA to clarify when additional position level reporting is appropriate; (iii) ESMA should set up a mechanism for counterparties to decide whether to report at position level; (iv) for cleared trades it should be CCP deciding the level of reporting, (v) it is not clear how this requirement fits together with the Article 3 of the draft RTS.

223. It should be clarified that Article 3 of the draft RTS lists the conditions that must be met for the position-level reporting to be applicable. Only if those conditions are met, counterparties have the choice whether to report at trade or at position level.

224. Given the received feedback, ESMA acknowledges the potential difficulties with agreeing bilaterally the level of reporting between counterparties and the negative impact of such problems on the reconciliation. Having in mind that the reporting at position level is an option, rather than a requirement, ESMA clarifies that reporting at trade level is a default way forward, meaning that in the absence of agreement between the counterparties, they should report the derivatives at trade level. Reporting at position level will be feasible only when all the relevant conditions are met and the two counterparties agree on reporting at position level.