301. ESMA detailed in the Consultation Paper two different approaches to reporting the field 'Direction', both approaches coming from the CDE guidance and differing depending on the type of instruments concerned. Under both approaches, for instruments like forwards (except for FX forwards), options, swaptions, CDS, CfDs, spreadbets and variance, volatility and correlation swaps, the counterparties should report buyer and seller as determined at the time of the transaction, while for other instruments, including IRS, TRS, most equity swaps, FX swaps and FX forwards, the counterparties should determine the payer and the receiver of each leg as determined at the time of the transaction.

302. Under the first approach, the counterparties would indicate in the report whether the reporting counterparty is buyer/seller in the derivative or payer/receiver for a given leg, using an indicator in the dedicated field ('Direction', 'Direction of leg 1' or 'Direction of leg 2'. Under the second approach, counterparties would report the direction of trade populating 4 additional fields ('Buyer', 'Seller', 'Payer', 'Receiver') with the LEI or client code of the relevant counterparty. ESMA expressed a preference for the first approach.

303. The vast majority of respondents agreed with ESMA as the first approach is more aligned with the current reporting of direction while the second approach would be more complex to implement and the costs associated with the provision of direction of the trade would exceed any marginal benefit associated with the information gained from it.