Council and Parliament strike deal on financial reporting requirements

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.