The European Securities and Markets Authority (ESMA) authorises eight repositories that banks and other market participants must use to record derivatives trades.
Data from trade repositories (TRs) is scrutinised by regulators to see who is behind each trade and whether risks are building up in the system.
The aim is to apply lessons from the financial crisis when Lehman Brothers collapsed and it took time to find out who was exposed to the bank's derivatives trades, raising fears about other banks and accentuating market turbulence.
ESMA reviewed fees charged by the TRs and in its findings published on Thursday said it was unclear whether the fees complied with EU rules that cost must be the key pricing factor.
"The ultimate aim is to ensure that customers know exactly what they are paying for and how the fees they are charged are set," ESMA Chair Steven Maijoor said in a statement.
TRs must demonstrate their fees, including fee caps, are driven by costs, the watchdog said.
Decisions to set fee caps do not seem to be driven by costs and raise the risk of potential discriminatory practices that are against EU rules, the watchdog said.
The watchdog is concerned that the lack of clarity on fees makes it harder to check if TRs give preferential treatment to some customers because they use other services as well.
Several TRs are owned by exchanges.
"TRs that are part of a group need to ensure that intra group transactions are on reasonable terms and on an arm's length principle to prevent discriminatory access and unfair cost allocation," ESMA said.
Small and less experienced customers in particular may not be getting enough detail to make an informed decision on which TR to use, ESMA said.
It found "areas for significant improvement" for TRs in their current fee practices.
The eight TRs authorised by ESMA are: Bloomberg Trade Repository Ltd, CME Trade Repository (>> CME Group), DTCC Derivatives Repository, ICE Trade Vault Europe (>> Intercontinental Exchange Inc), Poland's Krajowy Depozyt Papierow Wartosciowych, NEX Abide (>> NEX Group PLC), Regis-TR (>> Bolsas y Mercados Espanoles SHMSF SA) (>> Deutsche Boerse AG), and Unavista (>> London Stock Exchange Group Plc).
ESMA will sit down with TRs to see what steps they are taking to make fees more transparent.
It also reviewed fees at credit rating agencies, which it also regulates in the EU.
(Reporting by Huw Jones; Editing by Carolyn Cohn and Mark Potter)
By Huw Jones