The European Commission (EC) presented a new strategy to improve and modernize financial supervisory reporting in the European Union. The strategy builds on the conclusions of the comprehensive fitness check of EU supervisory reporting requirements in financial sector legislation. In line with the strategy, the next key implementation milestones will be the assessments by ESAs to further integrate reporting and improve consistency and data standardization within the respective sectors, the establishment of sectoral data dictionaries, the review of obstacles to data-sharing, and the formalization of the governance arrangements.
The aim the EC strategy is to modernize supervisory reporting in the European Union and to put in place a system that delivers accurate, consistent, and timely data to supervisory authorities at the Union and national levels, while minimizing the aggregate reporting burden for all relevant parties. This strategy will contribute directly to the objectives of the European Data Strategy and the Digital Finance package to promote digital innovation in Europe and to further the objectives of a Capital Markets Union. The fitness check of the supervisory reporting requirements concluded that there are inefficiencies and gaps in the way these requirements are defined in the European Union law and data are collected. This can have an effect on the ability of authorities to perform their supervisory functions. It also generates unnecessary costs for companies and does not allow full use to be made of modern digital technologies. However, digital technologies, including the supervisory technologies or suptech, have the potential to significantly reduce the reporting burden for companies and allow supervisors to gain insights from the reported data more effectively and efficiently. Thus, EC is proposing the Supervisory Data Strategy to address the shortcomings identified in the fitness check and to enable supervisory authorities to seize the opportunities of data-driven supervision. This strategy has the following four main building blocks:
- Ensuring consistent and standardized data that relies on clear and common terminology as well as on common standards, formats, and rules.
- Facilitating the sharing and re-use of reported data among supervisory authorities by removing undue legal and technological obstacles to avoid duplicative data requests.
- Improving the design of reporting requirements by developing guidelines based on best practices in applying better regulation principles in supervisory reporting.
- Putting in place joint governance arrangements to improve coordination and foster greater cooperation between different supervisory authorities (such as the European Supervisory Authorities, the European Central Bank, the Single Resolution Board, and the European Systemic Risk Board) and other relevant stakeholders, allowing them to share their expertise and to exchange information.
A common data dictionary is also part of the discussion, among other factors. The data dictionary will be a repository containing a description of the content and format of all data collected under various reporting frameworks in a structured, comprehensive, consistent and unambiguous manner, using terms anchored in legislation to establish a clear link between collected data items and the relevant legislative requirements. Another aspect of this strategy relates to the development of the supervisory data space, which aims to ensure that the data is reported only once and then shared and reused as needed by the different authorities overseeing the financial system in the European Union. EC has already proposed targeted amendments in certain legislation (for example, the Review of the Alternative Investment Fund Managers Directive (AIFMD) and the October 2021 Banking Package) to facilitate efficient sharing and reuse of data by authorities. Working with the European Supervisory Authorities (ESAs) and other authorities, EC will, by 2023, review the relevant legislation to identify other legal obstacles to data-sharing and stands ready to address them, where necessary.
- Press Release
- Text of Communication
- Questions and Answers
- Results of Reporting Fitness Check
- European Data Strategy
Keywords: Europe, EU, Banking, Insurance, Securities, PMI, Reporting, Suptech, Regtech, Common Data Dictionary, Basel, Supervisory Data Space, EC, EBA, ESAs
Previous ArticleESRB Recommends Reciprocation of Macro-Prudential Measures in EU
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.