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Growing demand for data makes it necessary to gather them in a consistent and standardised way across the financial sector.
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More supervisory authorities in scope
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Removing obsolete or double reporting and disclosure requirements to minimise costs
The Economic and Monetary Affairs Committee struck a deal with the Council on new rules to avoid double reporting and reduce the administrative burden for the EU financial sector.
Negotiators from the ECON and the Council agreed to enlarge the scope of the original Commission proposal. MEPs made sure that not only three European Supervisory Authorities (ESAs) responsible for supervision in the financial sector in the EU, but also the Single Resolution Board (SRB) responsible for resolving banks in distress and the European Anti-Money Laundering Authority (AMLA) would be obliged to follow new rules. In line with the Council proposal, European Systemic Risk Board (ESRB) is also in the scope. Finally, the Single Supervisory Mechanism (SSM) was added to the scope of the new rules, excluding national authorities of the participating member states. The authorities should regularly review the reporting and disclosure requirements in order to remove those that are obsolete, disproportionate or duplicative.
The EP negotiating team also assured that the authorities in scope would strive for the “report once” principle, so that information from financial institutions or other reporting entities is only reported once to one of these authorities. The authorities would share and reuse this information while safeguarding data protection, professional secrecy and intellectual property. They should designate a permanent single contact point for entities to indicate double, obsolete or redundant reporting and disclosure requirements.
Building on the sectoral work by the ESAs to integrate reporting, within five years the authorities will prepare a report on the feasibility and cost/benefits analysis of a cross-sectoral integrated reporting system.
Paulius Saudargas (EPP, LT), the lead MEP said:
I am confident that Better Data Sharing (BDS) and its provisions will contribute to achieving the objectives outlined by the European Commission President and clearly articulated in the Draghi report: namely, reducing administrative burden and simplifying procedures within the European Union. This will help facilitate the data reporting for financial institutions and data exchange among authorities.
“While a political compromise has been reached, and I remain hopeful that the file will be formally adopted by both the Parliament and the Council, it is important to note that the European Parliament has advocated for an even more ambitious and accelerated approach in this regard. Together with the EP negotiating team, I am pleased that, following intensive negotiations, we successfully agreed to extend the scope of BDS to include the SRB, AMLA, and SSM”.
EU Council on better data sharing and the deal on financial reporting requirements
Brussels, 17 December 2024
The Council and Parliament today reached a provisional agreement to simplify certain reporting requirements in the field of financial services and investment support (better data sharing). The new regulation will reduce administrative burden for authorities in the financial sector, by simplifying existing rules on data sharing between the European Supervisory authorities (ESAs) and other financial sector authorities and by limiting new reporting requirements.
The Council and Parliament agreed that the Joint Committee of the European Supervisory Authorities (ESAs) with all relevant authorities, would prepare a report on possibly setting up an integrated reporting system. The integrated reporting system would include a common data dictionary and a data space for collecting and exchanging information. The report would be drawn up to 5 years after the entry into force of the regulation. The Commission would then assess whether to submit a legislative proposal to establish such a system.
The provisional agreement specifies that the scope of information sharing would be limited to information stemming only from EU law. The national competent authorities will be involved in information sharing on a voluntary basis. Data sharing will function on the principle of ‘reporting once’, where public sector authorities would check whether the information is already available to other authorities before seeking information from financial institutions, except for time sensitive requests.
The Council and Parliament agreed to include the Single Resolution Board (SRB), European Central Bank’s Single Supervisory Mechanism (SSM) and the newly created Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) in the set of authorities that are allowed to issue a request for data sharing.
The exchange of information should lie with the ESAs and the European Systemic Risk Board (ESRB), which should share the information received from the national competent authorities with other ESAs and Union and national authorities.
The provisional agreement also introduces amendments to the InvestEU regulation, changing the reporting frequency from biannual to annual, which reduces the workload and administrative burden across all InvestEU windows with negligible implications on the implementation of the programme.
Next steps
The provisional agreement will now have to be confirmed by the Council and Parliament, before being formally adopted. Once adopted, the final text will be published in the Official Journal of the EU and enter into force.
Background
The Commission submitted the proposal to review EU legislation on reporting in the fields of financial services and investment support on 17 October 2023.
This aims to promote a more efficient collection of data and avoid double reporting with a direct benefit to European and national authorities and an indirect benefit for those financial sector entities having to provide information.
- Council agrees its position on simpler financial reporting requirements (press release, 19 June 2024)
- Council negotiating mandate on reporting requirements
- European capital markets (background information)
Source – EU Council