COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Strategy on supervisory data in EU financial services
Date: 2021-12-15
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: data collection, digital economy, digitisation, disclosure of information, exchange of information, financial services, financial supervision, report, smart technology, technical standard

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.12.2021  COM(2021) 798 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Strategy on supervisory data in EU financial services  
 
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Strategy on supervisory data in EU financial services 

1.  CONTEXT 

As digitalisation continues to increase1 and the EU progresses towards its digital targets 
for  20302,  new  challenges  and  opportunities  are  arising  that  are  shaping  all  areas  of 
society and the economy, including the financial sector. Over the last few years, digital 
technologies  have 
the  way  financial  market  participants  produce, 
communicate and use information – the lifeblood of finance – to make decisions. Data is 
at the centre of this transformation.  

transformed 

In its European data strategy3, the Commission  highlighted the  importance of data as  a 
potential source of growth and innovation for the EU economy, and stressed the need for 
better access to data and data sharing through common European data spaces. One of the 
top  priorities  of  the  Commission’s  digital  finance  strategy4  is  the  promotion  of  data-
driven innovation  in  finance. This  includes tools to  facilitate reporting and supervision, 
and  the  establishment  of  a  common  financial  data  space,  covering  business-to-business 
data, publicly disclosed data and supervisory data.   

Financial institutions and other entities active on financial markets are required to report 
a  wide  range  of  data  on  their  financial  condition  and  activities.  EU  and  national 
supervisory authorities need the data to supervise financial institutions and markets. Data 
enable  supervisors  to  monitor  risks,  ensure  financial  stability  and  market  integrity,  and 
protect investors and consumers of financial services in the EU.  

The  volume  and  granularity  of  data  reported  for  supervisory  purposes  have  grown 
substantially  over  the  last  decade.  In  aggregate,  financial  institutions  in  the  EU  are 
subject  to  more  than  500  reporting  obligations  comprising  more  than  1000  tables  with 
more  than  70  000  individual  data  points.5  Stricter  reporting  obligations  have  helped 
address  information  gaps  identified  during  the  global  financial  crisis  and  reflect  the 
increasing  complexity  and  interconnectedness  of  the  financial  system.  While  this  has 
significantly improved supervisory oversight, it has also placed an increasing burden on 
both  the  reporting  entities  and  the  supervisory  authorities  receiving  and  analysing  the 
data. 

Digital technologies can significantly reduce the reporting burden and allow supervisors 
to  gain  insights  from  the  reported  data  more  effectively  and  efficiently.  To  address  the 
opportunities and challenges of data-driven supervision, regulators around the globe are 

1 See https://digital-strategy.ec.europa.eu/en/policies/desi  
2 COM/2021/118 final 
3 COM(2020) 66 final  
4 COM (2020) 591 final 
5 For a detailed description and count of reporting requirements, see SWD (2019) 402 final, pp. 52-55 

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working to modernise reporting in their jurisdictions6. EU supervisory reporting and the 
manner  in  which  authorities  collect  and  use  data  need  to  keep  pace  with  these 
developments. 

The EU has  already delivered improvements in  a number of key  areas7 and is taking a 
leading  role  in  international  discussions8  to  foster  financial  data  harmonisation  and 
alignment  at  the  global  level.  To  ensure  further  progress  in  the  effectiveness  and 
efficiency of the EU supervisory reporting framework, more work will be required.  

The EU needs an improved supervisory reporting system which allows supervisors to: 

 

follow  developments  across  markets,  instruments  and  sectors  of  the  financial 
system with greater precision and speed;  

  make better informed and faster decisions to safeguard financial stability, market 
integrity  and  consumer  protection  and  to  deliver  on  other  objectives,  such  as 
monitoring the transposition of EU legislation and its effective enforcement;  

  better  coordinate  among  themselves  and  achieve  supervisory  convergence 

through more consistent and interoperable data sets;  

  while  at  the  same  time  minimising  the  compliance  burden,  in  line  with  the 
Commission’s better regulation principles and the commitment to systematically 
and proactively seek ways to reduce burdens imposed by legislation9. 

Building on extensive discussions with stakeholders10, the Commission is presenting this 
strategy,  which  outlines  the  approach  to  reach  the  objective  of  a  modern  supervisory 
reporting  system  in  the  EU.  The  strategy  contributes  to  the  objectives  of  the  European 
data strategy and the digital finance strategy to promote digital innovation in Europe. By 
supporting  supervisory  convergence,  it  also  contributes  to  the  objectives  of  the  Capital 
Markets Union (CMU).  

2.  BACKGROUND:  CURRENT CHALLENGES  

In  a  comprehensive  fitness  check  of  EU  supervisory  reporting  requirements11,  the 
Commission  concluded  that  the  current  reporting  requirements  in  Union  law  are 
necessary  and  effective  in  providing  supervisors  with  relevant  data.  However, 
inefficiencies were identified in the manner in which reporting requirements are defined 
and data are collected. This has adverse knock-on effects on the quality and usability of 
the  reported  data,  reducing  the  ability  of  supervisors  to  perform  their  functions.  Such 
inefficiencies also generate additional costs for reporting entities, which may amount to 

6 Insights on policy implementation, No 29, BSI Financial Stability Institute. 
7 For an overview, see also SWD (2019) 402 final, pp. 19-23. 
8 Including for example international discussions at the Financial Stability Board (FSB), the Committee on 
Payments  and  Market  Infrastructure  /  the  International  Organisation  of  Securities  Commissions  (CPMI-
IOSCO) and the LEI Regulatory Oversight Committee (ROC). 
9 COM(2021) 219 final 
10 Supervisory data collection | European Commission (europa.eu) 
11 SWD (2019) 402 final  

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as  much  as  EUR 4  to  12  billion12  per  year  to  comply  with  EU  reporting  requirements. 
Moreover, reporting frameworks do not make full use of modern IT tools.  

The fitness check identified five main areas for improvement:  

  Consistency  and  harmonisation  of 

requirements:  Reporting 
requirements and the detailed data specifications are not sufficiently harmonised 
and contain some inconsistencies and ambiguities. There is an insufficient use of 
common data standards, formats, and identifiers. 

reporting 

  Data  sharing  and  uses:  Different  authorities  sometimes  collect  partially 
overlapping data or data that is very similar. Data  are not efficiently shared and 
reused between authorities.     

  Legislative  process  and 

including 
instruments:  Reporting 
empowerments  for  the  European  Supervisory  Authorities  (ESAs)  to  develop 
technical  standards,  are  not  always  consistent  between  reporting  frameworks. 
Short  implementation  timelines  and  frequent  changes  to  the  rules  add  costs  for 
both reporting entities and supervisors. 

requirements, 

  Governance:  Reporting  requirements  are  often  developed  without  considering 
what  is  already  in  place.  There  is  scope  for  more  coordination  and  cooperation 
between  the  relevant  stakeholders,  from  the  early  design  phase  to  data  sharing 
between authorities. 

  Technology:  The  current  design  of  supervisory  reporting  requirements  does  not 
allow  automated,  straight-through  data  processing  in  all  areas.  Insufficiently 
standardised data also hinder the application of modern technologies by reporting 
entities and supervisory authorities.    

Building  on  these  findings,  the  Commission,  together  with  the  ESAs,  has  already 
delivered targeted improvements to supervisory reporting in different sectoral legislation. 
However,  some  of  the  identified  issues  apply  across  financial  services  sectors  and 
therefore should be addressed as part of a broader, cross-sectoral approach to supervisory 
data.    

3.  OUR OBJECTIVE   

The Commission’s long-term objective is to modernise EU supervisory reporting and put 
in  place  a  system  that  delivers  accurate,  consistent,  and  timely  data  to  supervisory 
authorities at EU and national level, while minimising the aggregate reporting burden for 
all relevant parties. 

Achieving this  goal requires  modifications to  current  supervisory  reporting frameworks 
and  the  methods  for  collecting  and  processing  financial  data.  Drawing  on  the  lessons 
learned from the fitness check and further discussions with stakeholders, the Commission 
concluded  that  such  a  reporting  system  should  include  the  following  main  building 
blocks: 

(1) 

Consistent  and  standardised  data:  Data  standardisation  and  a  common 
understanding  of  the  data  collected  under  different  reporting  frameworks  will 
make  it  easier  to  use  digital  technologies  and  simplify  the  transmission, 

12  ‘Study  on  the  costs  of  compliance  for  the  financial  sector’,  ICF  and  CEPS,  2019,  p.164.    Incremental 
costs of EU reporting requirements are estimated to represent approximately 0.5% of operating costs. 

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validation, and analysis of the data. Data specifications should rely on  clear and 
common terminology, as well as on common standards, formats and rules for the 
use  of  unique  identifiers.  This  will  avoid  ambiguity  in  their  interpretation  and 
make compliance easier.    

Data  sharing  and  reuse:  Facilitating  the  sharing  and  reuse  of  reported  data 
among  national  and  EU  supervisors  will  reduce  the  burden  on  reporting  entities 
by avoiding duplicative data requests. It will also allow supervisors to overcome 
legal  and  technical  barriers  to  using  data  held  by  another  supervisor.  Improved 
data sharing and reuse will require a dedicated regulatory framework and a secure 
IT environment to streamline data flows, validation and exchange mechanisms. It 
will also rely on the common specification and standardisation of data sets.  

Improved  design  of  reporting  requirements:  Well-designed  and  drafted 
legislation  is  essential  for  implementing  an  effective  and  efficient  reporting 
system. An improved process for the design of reporting requirements should be 
based  on,  and  further  extend,  current  best  practices  in  applying  Better 
Regulation13 principles to supervisory reporting, both in the legislation and in the 
specification of technical standards. It should also ensure that these principles are 
applied  consistently  and  systematically  across  reporting  frameworks,  from  the 
development of the initial requirements to subsequent reviews. 

Joint  governance:  Designing,  implementing  and  maintaining  a  modern  and 
improved  supervisory 
robust 
governance  arrangements.  These  will  improve  coordination  and  foster  greater 
cooperation  between  different  supervisory  authorities  and  other  relevant 
stakeholders, allowing them to share their expertise and exchange information. 

reporting  system  will 

require  sufficiently 

(2) 

(3) 

(4) 

Delivering these essential building blocks will enable a more effective and efficient use 
of modern technologies, including RegTech and SupTech14. The use of such  solutions 
will further reduce the compliance burden for reporting entities and increase the accuracy 
and timeliness of the data received by supervisors and improve their capacity to analyse 
it. 

4.  TRANSFORMING SUPERVISORY REPORTING 

The  development  of  a  modern  and  more  integrated  supervisory  reporting  system  is  an 
ambitious,  complex,  and  long-term  undertaking.  The  current  reporting  frameworks  and 
their  objectives  differ  significantly  across  the  different  financial  services  sectors  and 
between  national  and  EU  levels.  The  exchange  of  data  often  involves  multiple 
independent  authorities.  The  transition  to  a  common  system  needs  to  consider  the 
different  starting  points  and  objectives  of  the  various  EU  and  national  legislative 
frameworks,  and  will  require  the  commitment  and  coordination  of  both  the  financial 
services industry and the supervisors. It will necessitate redesigning some reporting and 
data collection processes and replacing legacy technical solutions.  

13  https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-regulation-why-

and-how_en 

14    RegTech  includes  technologies  that  help  to  fulfil  regulatory  requirements  more  efficiently  and 
effectively than existing capabilities. SupTech uses innovative technology to support supervision and helps 
supervisory authorities to digitise reporting and regulatory processes. See Section 4.5. 

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While modernising and improving supervisory reporting is expected to bring significant 
long-term benefits and cost savings, it also inevitably implies an investment of resources 
during  the  transition.  Therefore,  the  modernisation  of  supervisory  reporting  in  the  EU 
will require a gradual approach to reduce implementation risks and costs. The approach 
consists of both targeted amendments to sectoral measures as well as more far-reaching, 
longer term cross-sectoral improvements.  

Specifically,  the  Commission  will  use  the  regular  review  process  to  introduce 
targeted improvements in individual pieces of legislation. Such improvements include: 
(i)  removing  identified  overlaps  or  inconsistencies  within  a  legislative  act  or  across 
multiple acts; (ii) removing redundant or outdated reporting requirements; (iii) providing 
or  clarifying  specific  definitions;  (iv)  streamlining  data  flows  between  supervisory 
authorities; and (v) where appropriate, strengthening the proportionality of the reporting 
requirements.  

In parallel, drawing on their technical expertise, the Commission will mandate the ESAs 
to  assess  and  take  the  necessary  steps  to  further  integrate  reporting  and  improve 
consistency and data standardisation within their sectors.   

In a subsequent stage, building on the progress within the sectors, the Commission will 
seek  to  complete  the  implementation  of  the  building  blocks  and  undertake  any 
additional  measures  required  to  achieve  an  integrated  EU  supervisory  reporting 
system  across  all  financial  sectors.  In  2023,  the  Commission  will  prepare  a  report  on 
the progress made in implementing the strategy and the lessons learned. 

4.1.  Consistent and standardised data 

To  improve  consistency  in  the  reporting  requirements,  the  Commission  has  already 
introduced  targeted  improvements  in  a  number  of  legislative  frameworks  and  will 
introduce others as part of the regular legislative reviews. However, the Commission will 
primarily rely on mandates to the ESAs to ensure consistency within the different sectors.  

In  the  banking  sector,  the  European  Banking  Authority  (EBA)  has  already  received  a 
mandate  in  the  Capital  Requirements  Regulation  (CRR)15  to  assess  the  feasibility  of 
integrating the collection of prudential, statistical and resolution data. Although focused 
on  the  banking  sector,  the  work  covers  data  consistency  and  standardisation  as  well  as 
other  key  elements  of  the  strategy,  such  as  data  sharing  and  governance.  The  banking 
sector is  large and complex from  the reporting perspective, so best  practices developed 
there can be used as a pilot. Considering the results and recommendations of the EBA, 
the  Commission  will,  where  necessary,  propose  adaptations  to  the  legal  framework  to 
achieve consistency, standardisation and integration16.  

In the insurance sector, the recent Commission proposal for the review of the Solvency II 
Directive17  includes  a  mandate  to  the  European  Insurance  and  Occupational  Pensions 
Authority  (EIOPA)  to  work,  in  cooperation  with  other  ESAs  and  the  European  Central 
Bank  (ECB),  on  increasing  consistency  between  reporting  frameworks  and  on  data 

15 Regulation (EU) 2019/876, Article 430c  
16 The  EBA ‘Discussion paper on a feasibility study of an integrated reporting system  under Article 430 
CRR’  was  published  in  March  2021.  The  final  feasibility  study  is  due  for  publication  at  the  end  of 
December 2021. 
17 COM (2021) 581 final 

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standardisation. EIOPA should prioritise the areas of collective investment undertakings 
data and derivatives reporting, where overlaps are most prominent. EIOPA will also aim 
to  identify  and  address  any  areas  of  duplication  or  inconsistencies  with  other  sectoral 
frameworks.  The  Solvency  II  review  also  introduces  targeted  simplifications  and 
enhanced proportionality in reporting. 

For  the  investment  funds  sector,  in  the  proposal  for  the  review  of  the  Alternative 
Investment  Fund  Managers  Directive  (AIFMD)18  adopted  in  the  CMU  package  in 
November  202119,  the  Commission  proposes  to  empower  the  European  Securities  and 
Markets Authority (ESMA) to improve data collection from alternative investment fund 
managers  and  to  harmonise  data  reporting  requirements  for  undertakings  for  collective 
investments  in  transferable  securities  (UCITS).  Before  amending  or  developing  new 
reporting templates, ESMA is required to carry out a technical assessment, working with 
the ECB and EIOPA. The purpose of the assessment is to ensure consistency with other 
reporting  requirements  for  investment  funds,  including  in  particular  the  data  already 
collected for statistical purposes by the European System of Central Banks (ESCB). 

In  terms  of  reporting  in  financial  markets,  some  inconsistencies  between  frameworks 
have  already  been  resolved  in  the  European  Market  Infrastructure  Regulation  (EMIR) 
Refit20, and ESMA is delivering further improvements at technical level. In the proposal 
for the review of the Markets in Financial Instruments Regulation (MiFIR)21 adopted in 
the CMU package, the  Commission proposes to  align the empowerments for ESMA to 
adopt technical standards and ensure greater consistency in transaction reporting between 
these  frameworks.  In  addition,  ESMA  is  tasked  with  assessing  options  for  further 
integration of reporting and streamlining the data flows. The MiFIR review also advances 
the  creation  of  a  consolidated  tape  for  equities  and  bonds.  The  aim  is  to  ensure 
consistency with data already reported and to develop the transparency standards for the 
tape as a subset of the reporting requirements. This will improve data quality and avoid 
unnecessary additional costs for the industry. 

Building on these sectoral initiatives, the Commission will coordinate the development 
of  a  common  data  dictionary  to  ensure  consistency  and  standardisation  across  the 
financial  sectors.  Having  common  standards  to  define  the  format  of  the  data  will  also 
make  it  easier  to  share  and  reuse  data  for  different  purposes.  In  addition,  the  data 
dictionary  will  contribute  to  other  longer-term  goals  such  as  making  reporting 
requirements machine-readable and executable. 

The dictionary will contain 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  requirements22.  The  relevant 
authorities will implement the technical elements of the dictionary. The Commission will 
develop the rules for its use and governance.  

18 COM(2021) 721 final 
19  COM/2021/720 final 
20  Regulation (EU) 2019/834 
21  COM(2021) 727 final 
22  The data dictionary will be a repository of information on the data to be reported. It will define the data 
in legal and business terms and include other information needed to use the data, such as: allowed values, 
format, access restrictions, relation to other data items (e.g. is part of or sum of other data items). For 
examples, see CPMI/IOSCO ‘Harmonisation of critical OTC derivative data elements’ and the Bank 
Integrated Reporting Dictionary (BIRD) developed by the ESCB and the banking industry.  

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Recognising  the  complexity  of  the  task,  the  Commission  will  draw  on  the  technical 
expertise  of  the  ESAs  and  the  ECB,  who  already  have  experience  in  building  sectoral 
data  dictionaries.  ESMA  has  recently  started  work  on  a  data  dictionary  in  its  domain. 
EIOPA  and  EBA  share  the  same  data  description  methodology  and  are  working  on 
achieving  closer  alignment  of  their  respective  data  dictionaries.  The  ESCB,  under  the 
direction of the ECB, has established and continues to expand its single data dictionary 
for  statistical  reporting  in  the  banking  sector  under  its  integrated  reporting  framework 
(IReF)23.  The  Commission  has  already  mapped  existing  reporting  requirements  and 
carried out a pilot project24, using machine learning methodologies, to build a glossary of 
concepts. The glossary will list the terms used in legislation and their definitions. It will 
help clarify and streamline the set of legal concepts that will be used in the common data 
dictionary,  which  will  describe  the  individual  data  fields  to  be  reported.  The  aim  is  to 
have the sectoral data dictionaries based on the underlying concept glossary in place by 
2024.  

A  key  element  for  ensuring  data  consistency  is  the  full  use  of  internationally  accepted 
common  identifiers,  such  as  the  unique  product  identifier  (UPI),  the  unique  transaction 
identifier (UTI) and the legal entity identifier (LEI). The LEI, which allows unique and 
unambiguous identification of entities and is the most widely used global entity identifier 
in  the  financial  sector,  is  particularly  helpful  in  linking  individual  data  sets,  thereby 
facilitating  supervision.  The  Commission  will  therefore  further  expand  and  promote  a 
more consistent use of the  LEI in  the financial sector by closing a number of key  gaps 
and  introducing  requirements  for  its  use  in  relevant  legislation25.  Following  a 
recommendation by the European Systemic Risk Board (ESRB),26 the Commission will 
by 2023 report on whether or not to make the LEI mandatory for a wider range of legal 
entities across the EU. Finally, the Commission will pursue efforts in international fora to 
promote  the  uptake  of  the  LEI  and  other  common  identifiers  in  the  financial  sector 
globally.  

Action  1.  To  increase  consistency  and  standardisation  of  reported  data,  the 
Commission will: 
a)  give mandates and, where necessary, propose to  strengthen the empowerments 
to the ESAs in key pieces of legislation to further integrate reporting within their 
areas of competence; 

b)  update the mapping of reporting requirements in the financial sector and create 
a  comprehensive  glossary  to  clarify  and  streamline  the  set  of  legal  concepts 
used; 

c)  work with the ESAs and the ECB to develop and promote the use of a common 

data dictionary, starting with establishing sectoral dictionaries by 2024; 

d)  propose amendments in relevant reporting frameworks to systematically require 
reporting of the LEI by entities that have it and, by 2023, report on whether or 
not to make the LEI mandatory for a wider range of legal entities.  

23 See IReF initiative of the Eurosystem. Implementation is planned for 2024-2027.  
24  ‘Implementing  dictionaries  of  regulatory  concepts  and  reporting  obligations  by  assisted  machine 
learning’, Final report, prepared by Crosslang, ID Lab and Milieu (2021). 
25 For example, the Commission proposes greater use of the LEI in payments and as part of the legislative 
package on anti-money laundering.  
26 ESRB/2020/12 

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4.2.  Enhancing the sharing and reuse of data 

Data should be reported only once and then shared and reused as needed by the different 
authorities overseeing the financial system in the EU. The Commission therefore intends 
to put in place a system where reporting entities provide high quality data and authorities 
share the data they collect as much and as efficiently as possible, while safeguarding data 
security and professional secrecy. 

To  this  effect,  in  the  AIFMD  review  proposal,  the  Commission  proposes  to  amend  the 
relevant provisions to ensure a more efficient data sharing process between authorities. In 
addition,  in  the  ongoing  review  of  the  Central  Securities  Depositories  (CSD) 
Regulation27,  currently  envisaged  for  adoption  in  Q1  2022,  the  Commission  explores 
ways  to  facilitate  the  cross-border  provision  of  CSD  services  and  establish  formalised 
and standardised procedures for the cooperation of supervisors, including the sharing of 
data.  In  2022,  the  Commission  will  also  assess  data  sharing  provisions  in  the  review 
required under article 46 of the Money Market Fund Regulation28.   

The Commission is supporting the ongoing technical work by the ESAs to enhance the 
sharing and reuse of reported data in their respective sectors. ESMA aims to become the 
data  hub  for  EU  securities  markets  and  improve  the  availability  of  information  at  EU 
level  for  other  authorities,  investors  and  market  participants.  Under  its  integrated 
reporting mandate, EBA is assessing the feasibility of a reporting system with a central 
data register, i.e. a single point of contact for the competent authorities, providing them 
with  additional  support  and  coordination  for  the  transmission  of  data  queries  and  the 
exchange of information. The EBA EUCLID29 data hub already includes all supervisory 
and resolution data of the EU banking sector, and EBA will continue to build on this hub 
in  the  implementation  phase  of  its  integrated  reporting  project.  Finally,  EIOPA  is 
continuing to develop its data framework to securely collect, manage, analyse, distribute 
and  publish  data.  At  its  core  is  a  central  repository  which  EIOPA  will  maintain  while 
implementing technical improvements.  

The Commission, working with  the ESAs, the ECB and other authorities, will by 2023 
review the relevant legislation to identify other legal obstacles to sharing of supervisory, 
statistical  and  resolution  data  and  stands  ready  to  address  them  where  necessary.  This 
work  will  build  on  provisions  in  relevant  Union  legislation  which  already  provide  for 
data  sharing  between  authorities  at  both  EU  and  national  level  under  strict  conditions. 
Together with a common data dictionary, this will lay the foundations for a supervisory 
data  space30  where  data  can  be  accessed,  shared  and  reused  by  all  relevant  authorities 
while protecting data confidentiality and security.  

The  Commission  will  propose  a  set  of  rules  for  determining  data  access  rights  and 
allocating responsibility for assessing data quality, as well as procedures to be followed 
by  various  authorities  before  adding,  modifying  and  discontinuing  reporting  requests. 
The Commission will also aim for further standardisation of data sets through the use of 

27  Regulation  (EU)  No  909/2014  of  the  European  Parliament  and  of  the  Council  of  23  July  2014  on 
improving securities settlement in the European Union and on central securities depositories and amending 
Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012. 
28 Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money 
market funds. 
29  See EBA/DC/2020/335 
30    Data  spaces  were  introduced  in  the  wider  European  data  strategy  to  mean  concrete  arrangements  for 
data sharing and data pooling. See COM(2020) 66 final.  

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the common data dictionary and support the development of a secure IT environment, 
in which data can be accessed and exchanged safely, irrespective of its physical location 
of storage. The Commission will continue to work closely with supervisory authorities, 
in  particular  the  ESAs,  the  ECB,  the  ESRB  and  the  Single  Resolution  Board  (SRB)  to 
determine the precise design of the supervisory data space. 

Supervisors  should  be  able  to  seamlessly  combine  supervisory  data  with  publicly 
disclosed  information  to  gain  a  more  complete  view  of  the  financial  system  without 
having to collect additional data. The proposed European Single Access Point (ESAP)31 
will assist supervisors in getting easier access to data published by regulated entities. The 
data specifications and relevant rules for the supervisory data space and those on public 
disclosures  by  regulated  entities  in  the  financial  sector  will  be  coordinated  to  ensure 
comparability and interoperability of the respective data sets.  

In  addition,  some  public  disclosures  can  be  compiled  using  supervisory  data.  In  its 
banking package adopted on 27 October 202132, the Commission  proposes to empower 
EBA  to  centralise  individual  bank  disclosures  with  the  aim  of  increasing  access  to 
prudential data. The proposal also requires EBA to publish disclosures of small and non-
complex  banks  based  on  the  data  that  are  reported  to  supervisors,  which  eliminates 
additional  disclosure  costs  for  banks.  The  Commission  will  continue  the  work  in 
cooperation  with  the  ESAs  to  have  in  place  a  framework  to  produce  disclosures  from 
supervisory data and further coordinate public and supervisory data, in particular during 
the development of the technical standards for the ESAP. 

The  reported  supervisory  data  represent  a  ‘treasure  trove’  of  potential  information.  To 
maximise  its  value,  where  appropriate  and  possible,  the  Commission  encourages 
initiatives  by  supervisory  authorities  to  produce  market  analyses  and  disseminate 
information for the benefit of regulators, market participants and the wider public.  

The  Commission  will  also  look  into  ways  to  make  data  available  more  extensively  for 
research and innovation, while protecting data confidentiality. In its 2023 progress report, 
the Commission  will  assess whether  any regulatory  adjustments can be made to  enable 
the sharing and reuse of reported data for innovation purposes.   

31  COM(2021) 723 final, COM(2021) 724 final, COM(2021) 725 final 
32  COM(2021) 663 final, COM(2021) 664 final, COM(2021) 665 final 

9 

 
 
                                                 
Action 2. To enhance the sharing and reuse of data and lay the foundations of the 
supervisory  data  space,  the  Commission,  working  with  the  ESAs  and  other  EU 
authorities, will: 

a)  identify legal and technical obstacles to data sharing and present options for the 

design of a supervisory data space in its 2023 progress report; 

b)  propose  removing  any  undue  legal  obstacles  to  data  sharing  between 
authorities, including in the upcoming legislative reviews in 2022 and 2023; 
c)  support  the  development  of  a  secure  IT  environment,  in  which  data  can  be 

accessed and exchanged safely; 

d)  coordinate  the  data  specifications  between  supervisory  reporting  and  public 
disclosure requirements, also when developing technical standards following the 
2021 ESAP proposal, and assess options to enable the reuse of supervisory data 
for public disclosure; and 

e)  work with the Digital Finance Expert Group on ways to use supervisory data for 

research and innovation. 

4.3.  Improving the design of reporting requirements 

The fitness check highlighted a number of shortcomings in the way supervisory reporting 
requirements are designed and developed. Based on these findings, the Commission will 
redouble  its  efforts  to  ensure  that  Better  Regulation  principles  are  followed  rigorously, 
also  when  it  comes  to  developing  supervisory  reporting  requirements,  including  the 
enhancements announced in the recent Commission communication on ‘Joining forces to 
make  better  EU  laws  and  to  prepare  for  the  future’33.  As  part  of  these  efforts,  the 
Commission  also  asks  the  European  Parliament  and  the  Council,  when  considering 
additional reporting requirements, to comply with the Better Regulation principles34.   

In  order  to  reflect  and  address  the  specific  nature  of  developing  supervisory  reporting 
requirements, in 2022 the Commission will prepare a set of guidelines to further improve 
the  design  and  process  of  drafting  these  requirements  within  EU  financial  sector 
legislation.  These  will  cover  topics  such  as  (i)  ensuring  that  the  role  of  reporting 
requirements  in  achieving  policy  objectives  is  set  out  more  clearly  in  legislation;  (ii) 
avoiding technical details in legislation and improving the empowerments for the ESAs 
to  develop  consistent  and  precise  specifications  in  the  technical  standards;  (iii)  setting 
timelines and dates of entry into force that allow sufficient time for the ESAs to develop 
the 
to  reporting 
requirements;  and  (v)  better  coordinating  deadlines  for  reporting  and  the  frequency  of 
reporting.  

the  planning  of  changes 

technical  standards;  (iv) 

improving 

The Commission  also calls on the ESAs  and  other EU and national authorities  to  fully 
assess  the  impact  of  technical  reporting  instructions  they  develop,  in  line  with  Better 
Regulation principles, and in particular to:  

 

regularly review the collected data and its use and ensure that only data which is 
required to meet policy objectives are requested;  

33   COM(2021) 219 final 
34  In  line  with  the  commitments  made  in  the  Interinstitutional  Agreement  between  the  European 
Parliament, the Council of the European Union and the European Commission of 13 April 2016 on Better 
Law-Making (OJ L 123, 12.5.2016, p. 1). 

10 

 
 
 
                                                 
 
  use  clear,  consistent  and  standard  terminology  across  different  legislative 

frameworks;  

  use common standards, formats, models and identifiers;  
  coordinate  the  development  of  reporting  requirements  among  supervisors  and 
closely  cooperate  on  designing  the  technical  infrastructure  for  collecting  and 
processing the data;  
reduce  the  use  of  additional  national  reporting  requirements  and  ad  hoc  data 
requests  as  far  as  possible  and  ensure  that  any  such  requests  follow  standard 
design principles; and  

 

  ensure  that  reporting  requirements  take  into  account,  to  the  extent  possible, 

standard business processes.  

In  order  to  establish  a  common  supervisory  culture,  the  ESAs  are  to  develop  and 
maintain  up-to-date  Union  handbooks  on 
the  supervision  of  financial  market 
participants35.  The  Commission  will  ask  the  ESAs to  include  and  regularly  update  best 
practices,  methodologies  and  processes  related  to  supervisory  data  collection  in  these 
handbooks. 

Finally,  the  Commission  will  assess  options,  including  a  new  legal  instrument,  for 
streamlining the current lengthy and often complex process of developing regulatory and 
implementing technical standards for supervisory reporting. These options would aim to 
give  the  ESAs  sufficient  flexibility  when  adopting  or  modifying  highly  technical 
elements of the requirements, while maintaining sufficient control and accountability. 

Action 3. To improve the design of reporting requirements, the Commission will: 

a)  develop  a  set  of  dedicated  guidelines 

in  2022 
requirements, in line with Better Regulation principles; 

for  drafting  reporting 

b)  ask the ESAs to include and regularly update best practices, methodologies and 
processes  on  supervisory  data  collection  in  their  supervisory  handbooks  to 
strengthen convergence between national approaches; and 

c)  by  2023,  assess  the  possibility  of  a  more  effective,  efficient  and  flexible 
regulatory  process  for  defining  the  highly  technical  elements  of  supervisory 
reporting requirements. 

4.4.  Joint governance and implementation 

Transitioning  to  an  improved  EU  supervisory  reporting  system  that  is  fit  for  the  future 
will  require  the  joint  effort  and  commitment  of  all  stakeholders.  It  will  require  an 
appropriate forum for further reflection on the technical details and the identification of 
additional  initiatives  needed  to  achieve  the  long-term  objective.  This  calls  for  an 
appropriate  governance  structure  to  ensure  ongoing  cooperation,  coordination,  and 
exchange of information between the different authorities involved and with the industry. 
Such a structure will ensure that work progresses in a timely and efficient manner, and 
that  the  different  sectoral  initiatives  are  sufficiently  coordinated  to  ensure  that  the 
subsequent cross-sectoral bridges can be built. 

35    The  requirement  to  develop  and  maintain  an  up-to-date  supervisory  handbook  was  introduced  by 
Regulation (EU) 2019/2175  

11 

 
 
 
                                                 
To  ensure  success,  this  governance  structure  must  involve  the  Commission,  the  three 
ESAs, the ECB, the Single Resolution Board and the European Systemic Risk Board36, 
both  at  the  board  level  to  ensure  firm  commitment  by  all  parties,  and  at  the  technical 
level  to  work  out  the  day-to-day  practicalities  of  reporting  and  to  provide  technical 
advice on any legislative or non-legislative actions that may be needed. In addition, any 
future governance structure should encompass the national competent authorities (NCAs) 
and include arrangements to bring in industry expertise as needed. 

In  line  with  the  Commission’s  gradual  approach,  and  in  order  to  minimise  resource 
constraints  and  avoid  a  proliferation  of  bodies  dealing  with  supervisory  reporting, 
existing  structures  will  be  used  to  the  extent  possible.  The  Commission  has  already 
established  an  informal  coordination  body  (the  ‘Supervisory  Reporting  Roundtable’), 
comprising  reporting  experts  of  all  of  the  EU  authorities  mentioned  above.  This  group 
guided the preparation of the fitness check of supervisory reporting requirements and has 
since  worked  together  to  exchange  views  and  find  common  positions  on  the  future 
reporting system. In the first stage, the Commission will continue to rely on this group to 
further deepen cross-sectoral  coordination and cooperation and to  advance the work on 
each of the main building blocks.  

By  2023,  working  together  with  the  relevant  EU  authorities,  the  Commission  will 
formalise  the  governance  arrangements  as  the  work  on  the  strategy  progresses.  Within 
the  banking  sector,  the  mandate  in  the  CRR  already  provides  for  the  possibility  of 
creating a joint data committee to effectively advance the development of  an integrated 
reporting system for banks and move the project to the implementation phase. This can 
serve as a potential blueprint for a future cross-sectoral governance structure.  

Given  the  global  nature  of  the  financial  system,  the  need  for  coordination  and 
cooperation extends beyond the EU to our international partners. International alignment 
and more consistent reporting across jurisdictions allows for more effective supervision 
at  global  level  and  helps  avoid  arbitrage  between  jurisdictions.  It  is  also  necessary  to 
reduce  the  reporting  burden  of  the  many  larger  EU  financial  entities  with  international 
activities  that  have  to  report  to  authorities  in  several  jurisdictions.  The  Commission,  in 
coordination  with  other  EU  authorities,  is  already  actively  participating  in  various 
international initiatives37 which aim to prevent further fragmentation and promote greater 
use of common elements of supervisory data. We will continue our involvement in these 
activities to help drive forward international efforts to enhance data standardisation and 
alignment of reporting requirements where it lies in the EU’s interest and to promote EU 
solutions and approaches.   

The  Commission  recognises  that,  in  addition  to  the  major  benefits  expected  from  this 
strategy, there will also be sizeable adjustment costs for reporting entities and supervisors 
that  accrue  over  time.  However,  the  proposed  gradual  approach,  supported  by  the  joint 
governance  and  close  stakeholder  collaboration,  will  allow  optimal  choices  to  be  made 
and sufficient time for adjustment and implementation. This will help to ensure that the 
costs associated with the implementation of the future supervisory reporting system are 
minimised and the benefits maximised for all stakeholders.    

36 The future structure may also include the  new  Authority for anti-money laundering and countering the 
financing of terrorism, as proposed in COM(2021) 421 final. 
37 Such as those led by the FSB, the BCBS, CPMI-IOSCO and the ROC. 

12 

 
 
                                                 
The  Commission  will  explore  and  foster  models  of  cooperation  and  co-investment 
between  different  groups  of  stakeholders  to  ensure  that  the  necessary  resources  are 
available  and  to  provide  the  right  incentives  to  implement  the  strategy38.  The  EU 
authorities,  like  other  stakeholders,  are  already  devoting  a  significant  part  of  their 
budgets  to  improving  the  reporting  processes  and  related  capacities.  The  Commission 
stands  ready  to  provide  support  to  Member  States  implementing  administrative  or 
structural  reforms,  including  to  build  data  capacities39.  Moreover,  dedicated  EU 
programmes40, which support the development of EU digital capacities, are available to 
support  standardisation  activities  and  projects  to  further  develop  the  technical 
infrastructure and tools of EU and national supervisory authorities. 

Action 4. To ensure effective implementation of the strategy, the Commission will: 

a)  by 2023, formalise a governance structure to implement and maintain the future 
reporting system, building on the ‘Supervisory Reporting Roundtable’; and 
b)  support EU and national supervisory authorities  through available EU funding 
programmes  for  standardisation  and  the  development  of  digital  capacities  and 
technical infrastructure. 

4.5.  Promoting the use of modern technologies 

Modern  information  technologies  have  a  crucial  role  in  facilitating  data-driven 
supervision. This strategy will put in place the necessary conditions for the optimal use 
of  RegTech  and  SupTech  tools.  RegTech  can  enable  more  cost-effective,  highly-
automated  reporting  by  helping  reporting  entities  provide  data  more  accurately  and 
rapidly.  SupTech  can  assist  supervisory  authorities  by  allowing  faster  processing  and 
more accurate and sophisticated analyses of the reported data to support their decisions. 
The right technology will also be needed to implement and maintain key elements of the 
future  reporting  system  such  as  the  common  data  dictionary  and  the  supervisory  data 
space.  

To help accelerate the uptake of these technologies, the Commission will work with the 
European  Forum  of  Innovation  Facilitators41  to  develop  and  test  novel  technical 
solutions.  The  Commission  will  also  build  on  the  reporting  initiatives  of  supervisory 
authorities at  national level42  and, by  2024,  prepare a  report  to  share best  practices. As 
announced  in  the  digital  finance  strategy,  in  2022  the  Commission  will  launch  the  EU 
Digital  Finance  Platform  to  connect  stakeholders  and  public  authorities  across  the  EU. 
This  will  provide  opportunities  for  firms  to  develop  and  test  innovative  applications, 
thereby helping to foster innovation in regulatory and supervisory technologies.  

38 Examples include ESMA’s data project and system development for NCAs; the co-development of data 
infrastructure between members of the ESCB coordinated by the ECB; development of a tool by EIOPA to 
help  small  insurance  companies  prepare  Solvency  II  reports  in  the  XBRL  format;  public/private 
partnerships set up by some Member States. 
39  Based  on  Regulation  (EU)  2021/240  of  the  European  Parliament  and  of  the  Council  establishing  a 
Technical  Support  Instrument  for  the  preparation  and  implementation  of  administrative  and  structural 
reforms. A current project is ongoing to develop an NCA’s capacities for data-driven supervision.  
40  Such  as  the  Commission’s  annual  Union  work  programme  for  European  standardisation  or  the  new 
Digital Europe programme. 
41 As announced in the digital finance strategy (COM (2020) 591 final) 
42 Such as in Austria (see https://www.aurep.at/), Italy (see https://www.cooperazionepuma.org/) and 
Denmark (see https://arkitektur.digst.dk/sites/default/files/white_paper_on_a_common_public-
sector_digital_architecture_pdfa.pdf) 

13 

 
 
 
                                                 
 
in  supervisory 

Improving  the  clarity  and  consistency  of  supervisory  reporting  requirements  and 
increasing data standardisation are indispensable first steps to advance the use of modern 
technologies 
reporting 
requirements  and  clear  rules  will  facilitate  simpler  RegTech  solutions.  This  will  in 
particular  benefit  smaller  reporting  entities,  which  are  less  able  to  afford  complex  IT-
setups  or  the  services  of  third-party  providers.  More  consistent  and  better  quality  data 
will also enable supervisors to implement effective SupTech solutions.  

reporting.  Consistent  and  unambiguous 

Going  forward,  the  Commission  aims  to  make  reporting  requirements  readable  and 
executable  by  machines  (alongside  a  human-readable  form).  Machine-readable  and 
executable  requirements  (MRER43)  could  greatly  simplify  supervisory  reporting  by 
eliminating  the  need  for  human  intervention  to  read,  interpret  and  comply  with  the 
reporting  obligations.  MRER  will  ensure  the  complete  elimination  of  definitional 
ambiguities, based on precise and consistent instructions suitable for machine execution. 
A  pilot  project  to  assess  the  options  and  identify  the  prerequisites  for  the  transition  to 
MRER is ongoing, with results of an external study to be published in early 202244. Upon 
its  completion,  the  Commission  will  consider  introducing  MRER  in  selected  reporting 
frameworks and report on this in its 2023 progress report. 

The Commission will also explore and develop new types of data collection approaches. 
In financial markets, distributed ledger technologies (DLT) have the potential to enable 
supervisors  to  monitor  transactions  in  real  time  and  allow  them  to  extract  transaction 
reports directly from trading systems (rather than wait for the transaction parties to send 
reports).  The  DLT  pilot  regime  for  market  infrastructures45,  recently  agreed  by  the  co-
legislators, offers the Commission an opportunity to assess the benefits of using DLT for 
reporting purposes and test the technology under controlled conditions. For this purpose, 
and  building  on  previous  pilots  to  test  DLT  for  access  to  regulated  financial 
information46,  the  Commission  will  ask  ESMA  to  investigate  the  use  of  DLT  for 
supervisory  reporting.  This  assessment  will  also  cover  derivatives  markets  in  order  to 
prepare  for  a  possible  expansion  of  the  pilot  regime  and  formalisation  of  DLT-based 
transaction  systems  and  post-trade  infrastructure.  At  the  same  time,  at  the  European 
Parliament’s  request,  the  Commission  is  planning  a  pilot  project  on  the  technical 
foundations of supervision embedded into DLT.  The Commission will strive to support 
ESMA’s  investigation  by  leveraging  expertise  in  building  a  European  Blockchain 
Services Infrastructure (EBSI)47 in the public sector.  

43 I.e. requirements that are expressed in a logical and consistent sequence and that can be directly used by 
a deterministic computing system.  
44 Call for tender, FISMA/2020/OP/0001  
45 COM (2020) 594 
46  See  the  preceding  pilot  for  a  European  Financial  Transparency  Gateway  (https://eftg.eu/)  which 
demonstrated  efficiencies  of  sharing  financial  data  to  enable  data  traceability  and  improved  data 
management.  
47  https://digital-strategy.ec.europa.eu/en/policies/european-blockchain-services-infrastructure. 

14 

 
 
                                                 
Action  5.  To  take  full  advantage  and  promote  the  use  of  modern  technologies  in 
supervisory reporting, the Commission will: 

a)  work  with  the  European  Forum  of  Innovation  Facilitators  to  develop  and  test 
novel technical solutions for supervisory reporting benefiting smaller companies 
in particular; 

b)  in  its  2023  progress  report,  assess  the  feasibility  of  publishing  supervisory 
reporting requirements in a machine readable and executable form in selected 
frameworks, building on the ongoing pilot; and 

c)  carry out a study on supervision embedded in DLT in 2022 and request ESMA 
to investigate and prepare a report on new data collection approaches under the 
DLT pilot regime for market infrastructures.  

5.  CONCLUSION  

Supervision of the EU financial system relies on data that are timely, relevant and of high 
quality. Current supervisory reporting requirements are effective in providing supervisors 
with relevant data. However, more needs to be done to make EU supervisory reporting fit 
for the future – to reduce inefficiencies and unnecessary burdens, increase the quality and 
ensure the optimal use of the reported data, and enable reporting entities and authorities 
to fully harness the benefits offered by modern technologies. 

The Commission’s long-term vision on supervisory data in EU financial services focuses 
on four building blocks: (1) increased consistency and standardisation of data, (2) better 
data  sharing  among  authorities,  (3)  an  improved  process  for  developing  and  adopting 
reporting  requirements,  and  (4)  joint  governance.  Delivering  these  essential  building 
blocks will enable a more effective and efficient use of modern technologies. 

The  Commission  will  undertake  a  number  of  important  initiatives  and  put  in  place 
appropriate governance arrangements to foster cooperation and coordination between key 
stakeholders. At the same time, the Commission calls upon supervisors across the EU to 
work  together  to  streamline,  simplify,  and  modernise  supervisory  reporting  in  EU 
financial  services.  The  Commission  also  invites  the  financial  industry  to  continue  the 
constructive dialogue to develop solutions and technologies that help strengthen financial 
supervision while minimising its costs.  

By  2023,  the  Commission  will  report  on  progress  and  lessons  learned  from  these 
initiatives. 

15