The European Securities and Markets Authority (ESMA) is advancing its initiative to simplify reporting requirements across the EU. In a press release dated 4 May, it introduced a new harmonised fund reporting framework, as well as approaches to streamline transaction reporting. The goal is to reduce the reporting burden, avoid duplicate reporting, and simultaneously improve data quality for supervisory purposes.
Key Points from the Press Release
- “Report Once” as a Guiding Principle Market participants should in future report the same information only once, while authorities will exchange data more efficiently among themselves.
- New EU-Wide Fund Reporting Instead of multiple national reporting formats, a single European reporting template will be introduced. Data collection will remain with national authorities, but validation and analysis will be more centralised at the EU level. ESMA summarises these objectives in a final report.
- Review of Transaction Reporting This ESMA initiative is still under development. In an interim report, it discusses issues with the current reporting system, including duplicate reporting, varying requirements, and high IT costs. Potential solutions include the “Report Once” model and greater harmonisation between EMIR, MiFIR, and SFTR.
Impact on Banks, Asset Managers, and Securities Firms
The measures outlined above could have a positive impact on the industry, as reporting costs are likely to decrease significantly in the long term, and reporting processes may become more standardised and efficient. However, ESMA will first need to develop further technical standards and final recommendations, so implementation may still take some time. Reporting under the Securitisation Regulation is not directly affected. Furthermore, recent discussions have raised questions about whether ESMA will remain primarily responsible for securitisation reporting.
Conclusion
ESMA’s “Report Once” guiding principle is a step in the right direction towards reducing bureaucracy and achieving uniform reporting across Europe. However, relief for the industry may still be some time away, and direct impacts on the securitisation sector are not yet apparent.