The European Parliament adopted by 580 votes to 2, with 32 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 1092/2010, (EU) No 1093/2010, (EU) No 1094/2010, (EU) No 1095/2010 and (EU) 2021/523 as regards certain reporting requirements in the fields of financial services and investment support.

The European Parliament's position adopted at first reading under the ordinary legislative procedure amends the proposal as follows:

Streamlining of reporting and disclosure requirements

Financial institutions and other entities active on financial markets are required to report a wide range of information to enable Union and national authorities overseeing the financial system to monitor risks, ensure financial stability and market integrity, and protect investors and consumers of financial services in the Union.

According to the amended text, the European Supervisory Authorities and the European Anti-Money Laundering Authority should regularly review the reporting and disclosure requirements and propose, where appropriate, to streamline and remove redundant, obsolete or disproportionate requirements in relevant regulatory and implementing technical standards.

In addition, peer reviews of competent authorities should also be conducted to improve the effectiveness and the degree of convergence of those requirements. Both the tasks under the common supervisory culture as well as the peer reviews should be carried out on a standing basis, for which more human and material resources should be allocated as necessary.

Facilitating the sharing and reuse of information collected by the authorities responsible for supervision in the financial sector, while safeguarding data protection, professional secrecy and intellectual property, should reduce the burden on reporting entities and on authorities by avoiding duplicative requests.

Scope

The proposed amendments should also cover anti-money laundering authorities, resolution authorities and the supervisory functions of central banks. Accordingly, amendments are introduced with a view to amending Council Regulation (EU) 1024/2013, Regulation (EU) 806/2014 and the Regulation establishing the Anti-Money Laundering Authority.

In order to foster the exchange of information across the entire financial sector, it is proposed that all authorities responsible for supervision in the financial sector, including the European Systemic Risk Board (ESRB), the European Supervisory Authorities (ESAs), the Anti-Money Laundering Authority (AMLA), the Single Supervisory Mechanism (SSM), the Single Resolution Board (SRB), as well as all respective competent, supervisory and resolution authorities in the Member States, should be included in the scope of this amending Regulation.

Establishment of a Single Integrated Reporting System

The amended text stressed the need to enforce the ‘report once’ principle more consistently in the Union. All authorities responsible for supervision in the financial sector should only request information from financial institutions or other reporting entities if they have not already reported that information to other authorities. If information has already been reported to an authority, other authorities, should be able to request that information from that authority directly as opposed to collecting the same information, thereby putting an end to so-called double reporting.

By 2 years from the date of entry into force of this amending Regulation, all authorities responsible for supervision in the financial sector in the Union should establish a Single Integrated Reporting System. This system should include:

- a common data dictionary to ensure consistency and clarity of reporting requirements and data standardisation;

- a joint repository of reporting and disclosure requirements, of the descriptions of the collected data and of the authorities that hold it;

- a central data space including the technical design for collecting and exchanging information; and

- a permanent single contact point for entities to indicate instances of double reporting, and redundant or obsolete reporting or disclosure requirements.

ESAs opinions

The European Supervisory Authorities and the European Anti-Money Laundering Authority should therefore not only review regulatory and implementing technical standards, but should also provide opinions on ongoing ordinary legislative procedures and legislative acts already in force in order to:

- remove redundant or obsolete reporting and disclosure requirements in Union law or the national transposition of Union law by Member States;

- ensure consistent reporting and disclosure requirements across sector-specific, as well as cross-sector, legislation;

- ensure proportionality in reporting and disclosure requirements with respect to the nature, size and complexity of the reporting entity;

- ensure that complying with reporting and disclosure requirements are commensurate with the added value to fulfilling the tasks and objectives of the Authority.

Detection of systematic risks

In order to facilitate the detection, monitoring, prevention and mitigation of systemic risks to financial stability, the ESRB should have access to relevant information from the ESAs and the ECB by default. In that way, systematic risks could be better detected ex ante, as opposed to ex post, due to more rigorous request and sharing procedures.

Use of digital technology

The European Supervisory Authorities should assess policy options to further integrate reporting processes from a procedural and content perspective. They should duly assess opportunities arising from an increase in the use of digital technology to promote effective and efficient formats that embrace metrics, methods, and parameters, which will foster the competitiveness of the financial sector.

The Committee on Economic Affairs adopted the report by Othmar KARAS (EPP, AT) on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 1092/2010, (EU) No 1093/2010, (EU) No 1094/2010, (EU) No 1095/2010 and (EU) 2021/523 as regards certain reporting requirements in the fields of financial services and investment support.

The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:

Streamlining of reporting and disclosure requirements

The amended text stressed reporting and disclosure requirements play a key role in ensuring proper monitoring and correct enforcement of legislation. However, it is important to streamline those requirements, in order to ensure that they fulfil their intended purpose, to limit the administrative burden and to avoid undue duplication, not least for the regulatory and supervisory authorities of smaller financial jurisdictions. Reporting and disclosure requirements can also impose a disproportionate burden on entities, particularly on small and medium-sized enterprises or micro-enterprises.

Scope

Members propose that the proposed amendments should also cover anti-money laundering authorities, resolution authorities and the supervisory functions of central banks. Accordingly, amendments are proposed to Council Regulation (EU) 1024/2013, Regulation (EU) 806/2014 and the Regulation establishing the Anti-Money Laundering Authority.

In order to foster the exchange of information across the entire financial sector, it is proposed that all authorities responsible for supervision in the financial sector, including the European Systemic Risk Board (ESRB), the European Supervisory Authorities (ESAs), the Anti-Money Laundering Authority (AMLA), the Single Supervisory Mechanism (SSM), the Single Resolution Board (SRB), as well as all respective competent, supervisory and resolution authorities in the Member States, should be included in the scope of this amending Regulation.

Review of the reporting requirements

The European Supervisory Authorities and the European Anti-Money Laundering Authority should regularly review the reporting and disclosure requirements and propose, where appropriate, to streamline and remove redundant, obsolete or disproportionate requirements in relevant regulatory and implementing technical standards. The European Supervisory Authorities should coordinate this work via the Joint Committee of the European Supervisory Authorities.

In addition, peer reviews of competent authorities should also be conducted to improve the effectiveness and the degree of convergence of those requirements. Both the tasks under the common supervisory culture as well as the peer reviews should be carried out on a standing basis, for which more human and material resources should be allocated as necessary.

Establishment of a Single Integrated Reporting System

The amended text stressed the need to enforce the ‘report once’ principle more consistently in the Union. All authorities responsible for supervision in the financial sector should only request information from financial institutions or other reporting entities if they have not already reported that information to other authorities. If information has already been reported to an authority, other authorities, should be able to request that information from that authority directly as opposed to collecting the same information, thereby putting an end to so-called double reporting.

All authorities responsible for supervision in the financial sector in the Union should establish a Single Integrated Reporting System. That system should include a common data dictionary that ensures consistency and clarity of reporting requirements and data standardisation, a joint repository of requested and obtained data, a central data space for efficient data collection and exchange as well as a permanent single contact point for entities to indicate double, obsolete or redundant reporting and disclosure requirements.

ESAs opinions

The European Supervisory Authorities and the European Anti-Money Laundering Authority should therefore not only review regulatory and implementing technical standards, but should also provide opinions on ongoing ordinary legislative procedures and legislative acts already in force.

Detection of systematic risks

In order to facilitate the detection, monitoring, prevention and mitigation of systemic risks to financial stability, the ESRB should have access to relevant information from the ESAs and the ECB by default. In that way, systematic risks could be better detected ex ante, as opposed to ex post, due to more rigorous request and sharing procedures.

Use of digital technology

The European Supervisory Authorities should assess policy options to further integrate reporting processes from a procedural and content perspective. They should duly assess opportunities arising from an increase in the use of digital technology to promote effective and efficient formats that embrace metrics, methods, and parameters, which will foster the competitiveness of the financial sector.

PURPOSE: to amend Regulations (EU) No 1092/2010, (EU) No 1093/2010, (EU) No 1094/2010, (EU) No 1095/2010 and (EU) 2021/523 as regards certain reporting requirements in the fields of financial services and investment support.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: reporting requirements play a key role in ensuring proper monitoring and correct enforcement of legislation. Reporting requirements can however also impose disproportionate burdens on stakeholders, particularly affecting SMEs and micro-companies, also given organisational and technological developments that call for original reporting requirements to be adjusted. Their cumulation over time can result in redundant, duplicating or obsolete obligations, inefficient frequency and timing, or inadequate methods of collection.

Streamlining reporting obligations and reducing the administrative burden are therefore a priority.

Regulation (EU) No 1092/2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board, Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions, Regulation (EU) No 1095/2010 establishing a European Supervisory Authority and Regulation (EU) 2021/523 establishing the InvestEU Programme contain a certain number of reporting requirements which should be simplified.

In line with the Commission’s Communication on ‘ Long-term competitiveness of the EU: looking beyond 2030 ’, this proposal is part of a first package of measures to rationalise reporting requirements. This is a step in a process looking comprehensively at existing reporting requirements, with a view to assess their continued relevance and to make them more efficient.

CONTENT: the proposal seeks to rationalise reporting requirements in headline ambition ‘An economy that works for people’.

The proposed amendments to Regulation (EU) 1092/2010, Regulation (EU) 1093/2010, Regulation (EU) 1094/2010 and Regulation (EU) 1095/2010 set out how authorities overseeing the EU financial sector may share with each other information that they have obtained in carrying out their duties.

In the area of the internal market and specifically the financial services sector , the proposal will facilitate the exchange of information between authorities overseeing the financial sector and the consolidation of reporting currently performed under various requirements. The reporting requirements concern financial institutions and other financial market participants.

The proposal for the exchange of information between authorities overseeing the financial sector aims to avoid duplicative reporting requests where multiple authorities have the power to collect certain data from financial institutions or other market participants (whether the authorities already collect it or not) but lack the explicit legal basis to share it among themselves. The proposal is complemented by a mandate for the authorities to regularly review and remove reporting requirements that have become redundant or obsolete for instance due to enhanced information exchange.

The proposal will also increase the ability of the Commission to obtain data to prepare policies and carry out impact assessments and evaluations.

To further improve the utility of the reported data, the proposal also aims to support the use of information for the purpose of research and innovation in financial services, by allowing, under strict conditions, the sharing of information held by authorities with financial institutions, researchers, and other entities with a legitimate interest. The proposal will permit authorities to share relevant information obtained as part of their duties, subject to the safeguards on personal data, intellectual property rights and business confidentiality.

In the policy areas of competitiveness, growth, employment, innovation, social resilience, cohesion and strategic investments , the proposal aims to rationalise the requirements for reporting on implementation of the InvestEU Programme. The requirements cover the following sectors: access to finance for SMEs and investment support to companies in sustainable infrastructure, research, innovation and digitisation, and social investment and skills.

The proposal changes the reporting frequency from biannual to annual, which reduces the workload and administrative burden across all InvestEU windows (i.e. Sustainable infrastructure, SMEs, Research, innovation and digitisation, social investment and skills), with negligible implications on implementation of the programme.