The European Parliament and the Council have finalised the work on the Commission proposal to facilitate data-sharing and reduce redundant reporting in EU financial services, reaching a political agreement in December. The proposal was part of an ambitious package of measures adopted alongside the Commission’s 2024 work programme to rationalise reporting and reduce the administrative burden on companies. It is also part of the Commission’s wider work to improve and modernise supervisory data collection in financial services, underpinned by the strategy on supervisory data in financial services. Improved data sharing and reuse of reported data is one of the key building blocks of this strategy, together with data standardisation, better design of reporting requirements, improved governance and the use of modern technologies for regulatory compliance and supervisory purposes.
The new rules will make it easier for authorities overseeing the EU financial system to share information, and also reduce duplicative data requests to financial institutions and other market participants. This builds on and extends existing data‑sharing provisions and requires an exchange of information between authorities where both have the right to collect the same data. Sharing data will become easier, without interfering with the existing division of responsibilities between authorities. Importantly, it will also reduce duplicative reporting by firms to different authorities – and the administrative burden this entails. To ensure such a ‘report‑once’ principle, authorities would have to request information from any of the other authorities that have already obtained it, rather than asking the financial institutions directly. Moreover, the new provisions also cover clean or processed versions of such data, to avoid the situation where all authorities concerned have to clean and process the data separately.
This improved data sharing will cover all EU‑level authorities overseeing the financial system: the three European supervisory authorities (ESAs), i.e. the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), the European Systemic Risk Board (ESRB), the Single Resolution Board (SRB), the European Central Bank (ECB) in its role as competent authority for the single supervisory mechanism (SSM) and the new Anti‑Money Laundering Authority (AMLA). However, contrary to what was proposed by the Commission, the European Parliament and Council have decided to leave relevant national authorities outside the scope of the legislation. Therefore, any data sharing by them, apart from what is already mandated in sectoral legislation, will remain solely on a voluntary basis.
In addition, for even greater simplification, the ESAs will be required to move one step further with the important work they have already done on integrated reporting. Building on their ongoing sectoral work, they will need to develop a roadmap for the implementation of a cross‑sectoral integrated reporting system. Furthermore, they will have to regularly review reporting requirements, remove any redundant and obsolete ones, and keep the reporting burden to a minimum. Additionally, the European Parliament and Council have agreed to new rules that will encourage the re‑use of data for research and innovation purposes.
The agreement will bring the EU closer to a system where data is reported once and then shared and reused as much as possible. The Council and Parliament have agreed with the core of the Commission’s proposal. But regrettably some of the modifications they have introduced have made it less ambitious and dampened the potential for burden reduction, in particular by keeping national authorities – which like EU authorities collect data from companies – outside the scope of the regulation. The Council and Parliament also did not agree to the sharing of non‑identifiable data with the Commission, which would have made it easier for the Commission to estimate the impact of its proposals and to monitor it over time.
This initiative is just one step in a much wider Commission effort towards simplification and burden reduction. As set out in its recent ‘Simpler and Faster Europe’ Communication, the Commission has made simplification, reducing the reporting burden, cutting red tape, and simplifying legislation top priorities for the next five years. Regarding supervisory reporting in EU financial services, the Commission will continue to work with the relevant authorities – both EU and national – and encourage them to share data and limit requests from financial institutions and other market participants to what is strictly necessary and not already available, to avoid duplicative and redundant reporting, and achieve meaningful burden reduction.
Related links
Supervisory data collection
Strategy on supervisory data in EU financial services
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