The Challenges of Manual Declarations

Traditional methods of tracking and reporting market data usage depend on a vendor’s inventory platform or spreadsheets, email exchanges, and manual reconciliations. This outdated and cumbersome manual process² is time-consuming, prone to errors, and inefficient. Manual reporting also introduces significant delays, increasing compliance violation risks and potential revenue loss since data collection and reconciliation take longer. The process is also often resource-intensive, potentially leading to inaccuracies caused by human error, and less adaptable to new regulations or changes in data usage patterns because of rigid manual processes. Preparing for audits manually is complex and costly, further highlighting the limitations of this approach.

Despite various efforts to minimise manual intervention, it persists. Considering ESMA’s enhanced MiFIR audit regulations set to take effect in 2025, exchanges must adopt a proactive compliance strategy that ensures real-time data visibility, automated reporting, and a verifiable audit trail.

A Smarter Approach to Compliance

DRDM makes compliance easier by automating the data usage reporting process and ensuring it matches licensing terms. It automatically collects and reconciles usage data, removing the need for manual input or follow-ups. With real-time tracking and compliance monitoring, DRDM continuously checks that data usage aligns with contracts stored in the DCN, ensuring ongoing compliance.

The system easily integrates seamlessly with existing entitlement systems like EMRS and DACS. This means that automated data can be combined with manual inputs when needed, giving a comprehensive end-to-end view of usage. DRDM also helps exchanges protect revenue by spotting unauthorised data consumption and taking corrective actions to ensure data is accounted for and billed accurately.

All declarations are securely stored in DRDM’s purpose-built distributed ledger, creating an unchangeable, verifiable audit trail. This eliminates time-consuming manual audit preparations and ensures the system is always audit-ready.

Exchange and Data Provider Benefits

By automating the declaration process and ensuring compliance in real-time, Exchange benefits include:

1.  Compliance with ESMA MiFIR Requirements: DRDM provides automated, verifiable records that satisfy regulators without intrusive audits.
2. Reduced Administrative Burden: Automation handles manual data collection, reconciliation and reporting, freeing up valuable resources and minimising human error.
3. Increased Revenue Assurance: Tracking data usage in real-time ensures every transaction is accounted for, reducing the risk of missed billing and enhancing overall revenue capture.
4. Streamlined Audit Processes: DRDM’s immutable audit trail and pre-configured reports simplify compliance for both internal and external audits. This reduces audit preparation complexity and costs.
5. Building Stronger Client Relationships: A transparent, automated compliance process builds client trust and reduces disputes over data usage and billing.

How DRDM's Automated Declarations Work 

DRDM simplifies tracking and ensures compliance with market data usage. The system automatically sends clients declaration requests periodically, collecting data without disrupting daily operations. Clients can respond manually or through automated entitlement system integrations for a seamless experience.

Once the data is captured, DRDM validates it against the licensing agreement terms stored in the DCN and automatically highlights potential discrepancies for review. This efficiently ensures all data usage aligns with licensing agreements.

Compliance teams get real-time visibility into usage patterns and potential issues with live dashboards and automated alerts. This allows them to take swift action before problems arise. Identified discrepancies trigger automated follow-up, escalation, and resolution workflows to minimise compliance risks and prevent revenue loss.

Integration with Digital Contracts: A Unified Seamless System

DRDM’s Automated Declarations work together with the Digital Contracts module to create a unified compliance system. ensuring that:

• Contracts, Entitlements, and Declarations all operate within one framework.
• Usage Rights are Automatically Enforced based on a digital contract’s conditions.
• Compliance Reports are generated instantly, eliminating manual tasks.

This fully automated, closed-loop system ensures market data compliance from licensing terms to real-time usage tracking is efficient, verifiable, and audit-ready.

Future-Proofing Compliance with DRDM

As exchanges face growing regulatory scrutiny, manual declaration processes are becoming unsustainable. DRDM’s automated declarations offer a scalable and efficient solution to ensure accurate real-time data tracking, regulatory reporting, and improved revenue assurance.

By adopting DRDM’s automated declarations, exchanges can shift from reactive, manual compliance checks to a proactive, automated model that simplifies audits and strengthens client relationships.