Financial Data Standardisation Project -...

Financial Data Standardisation Project

23rd Eurofiling Workshop, ECB, Frankfurt

8 June 2017

Peter van den Hul

DG FISMA - European Commission

[email protected]

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DG FISMA - FDS Project

Background

▪ About DG FISMA

▪ REFIT programme

▪ Call For Evidence

▪ FDS Project is concrete initiative

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Objectives of the FDS project

▪ Share more efficiently financial data by enhancing interoperability of data standards

▪ Reduce compliance costs that arise in the context of legal reporting requirements by applying the "once for all" principle in data reporting

▪ Explore solutions improving the way data can be used by (or shared between) authorities

▪ Improve monitoring of the allocation and evolution of risk in the EU/global financial system

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Who is impacted ?


“In our role as Supervisors, we receive and validate Regulatory Reports to oversee the

Financial Sector”

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European Regulators & Supervisors ESA’s, NCA’s, ECB (SSM), ...

nnn.000+ regulated legal entities in the Financial Sector across Europe

European Union with its governance bodies

“We report a multitude of Regulatory Reports to multiple

Supervisors in different formats”

The Regulatory Scene. The three parties.

DATA EXCHANGE

“We frequently adjust and increaselegislation to stay aligned with the

real world”


“In our role as Supervisors, we receive and validate Regulatory Reports to oversee the

Financial Sector”

European Regulators & Supervisors ESA’s, NCA’s, ECB (SSM), ...

+20.000 regulated legal entities in the Financial Sector across Europe

European Union with its governance bodies

“We report a multitude of Regulatory Reports to multiple

Supervisors in different formats”

DATA EXCHANGE

“We frequently adjust and increaseregulation to stay aligned with the

real world”

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COMPLIANCE COST

RISK MONITORING AREA

The dual constraint on the Regulatory Scene.


According to the CfE …

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SAME LEVEL OF MONITORING AT LESS COMPLIANCE COST

EFFICIENCY

COST

To have an objective view, the FDS project analyses

inconsistencies, duplications, overlaps, redundanciesand possible synergies.


Maybe we can improve ?

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IMPROVED LEVEL OF MONITORING AT THE SAME COMPLIANCE COST

The FDS project studies the potential for standardisation and innovative reporting technology to shift the

reporting efficiency frontier upwards

COST

EFFICIENCY


9

We started analysing…


REPORTINGOBLIGATIONS

LEGISLATIVE ACTS: L1MS, L2MS

GAPS, OVERLAPS ?

FDS analyses top down and bottom up

…

50+ REPORTING FRAMEWORKS

top down analysis

GAPS, OVERLAPS ?


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LEVEL 1 MEASURES (internal refs)1, 7, 8, 9, 10, 12, 63, 66, 69, 72, 73, 75, 81, 82, 85, 90, 91, 95, 97, 104, 108, 110, 112, 113, 119, 123, 124, 133, 134, 135, 136, 137, 139, 143, 147, 148, 149, 162, 164, 167, 169, 170, 181, 187, 197, 214, 241, 244, 245, 256, 257, 270, 272, 274, 276, 280, 286, 291, 293, 294, 299, 308, 311, 315, 323, 324, 331, 344, 348, 352, 356, 359, 360, 366, 375, 382, 383, 386, 387, 389, 391, 750, 779, 798, 839, 840, 1070

LEVEL 2 MEASURES (internal refs)2, 3, 89, 99, 102, 105, 106, 117, 118, 125, 128, 138, 154, 158, 163, 165, 166, 168, 172, 173, 176, 184,196, 202, 205, 206, 215, 217, 219, 221, 229, 232, 233, 234, 243, 259, 262, 263, 268, 269, 275, 281, 283,284, 287, 297, 298, 300, 301, 302, 304, 305, 306, 313, 325, 326, 343, 346, 357, 358, 361, 363, 364, 365,372, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406, 407, 408, 409, 410, 411,412, 413, 414, 415, 417, 418, 419, 422, 427, 430, 434, 435, 437, 438, 439, 440, 442, 444, 445, 446, 447,448, 449, 451, 454, 455, 456, 457, 458, 459, 460, 464, 465, 469, 471, 472, 473, 474, 477, 480, 481, 482,483, 484, 485, 486, 487, 488, 489, 490, 491, 492, 500, 501, 502, 503, 504, 505, 509, 516, 517, 518, 519,520, 521, 523, 526, 527, 528, 529, 530, 531, 532, 533, 534, 535, 536, 537, 538, 539, 540, 541, 542, 543,545, 547, 548, 549, 550, 551, 552, 553, 554, 555, 556, 557, 558, 559, 560, 561, 562, 563, 565, 566, 567,568, 569, 570, 571, 572, 573, 575, 576, 577, 578, 579, 580, 581, 582, 588, 589, 590, 591, 592, 596, 597,598, 599, 600, 603, 604, 607, 608, 610, 622, 624, 629, 630, 631, 632, 633, 634, 635, 636, 637, 638, 639,640, 641, 642, 643, 644, 645, 646, 647, 648, 649, 650, 651, 652, 653, 673, 674, 675, 676, 677, 678, 679,680, 683, 692, 693, 694, 695, 696, 697, 746, 747, 748, 751, 752, 753, 754, 755, 756, 758, 759, 760, 762,763, 764, 771, 772, 773, 774, 775, 777, 786, 787, 788, 789, 795, 813, 814, 815, 816, 817, 818, 820, 821,822, 825, 828, 829, 830, 831, 832, 833, 834, 835, 836, 837, 871, 874, 875, 877, 878, 879, 880, 881, 882,884, 886, 892, 893, 894, 896, 898, 899, 900, 901, 902, 903, 904, 907, 908, 909, 910, 911, 912, 913, 919,920, 921, 934, 943, 954, 955, 956, 957, 963, 975, 1000, 1003, 1014, 1015, 1017, 1117, 1121, 1126

Examples: CRD IV, Solvency II, AIFMD, CSDR, …

Intermediate conclusion : regulatory measures* set the basis for 50+ “Reporting Frameworks”

5O+ “Reporting” Frameworks

* the current scope isthe FISMA regulation.


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A number of EU bodies is involved in the Reporting Frameworks or practically implementing them.

Note: it needs to be stated that other frameworks are (being) made by ECB. Maybe the scope should be extended to include the missing Reporting Frameworks.

Who is involved in these Reporting Frameworks?

EU Bodies and roles in Reporting Frameworks Implements InvolvedEuropean Commission 1 27

Member States 18 11

European Securities and Markets Authority 19 4

European Banking Authority 8 13

European Insurance and Occupational Pensions Authority 5 4

European Central Bank 1 4

European Supervisory Authorities 2

European Systemic Risk Board 1

European Payments Council 1

Committee of European Banking Supervisors 1

European System of Central Banks 1

International Accounting Standards Board 1

Committee of European Auditing Oversight Bodies 1

Council of Bureaux 1

Single Resolution Board 1


FDS focuses on Structured Data Reporting Frameworks

Many Reporting Frameworks result in periodical data exchangebetween Regulated Entities and Supervisors.

In many cases, the Regulator has imposed a data exchange format, or has explicitly described metadata.

Hence, we speak about “structured data”.

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DG FISMA - FDS Project 14

Ranking Criteria

• Market size

• Reporting population

• Report size

• Reporting frequency

• Potential business discrepancies between national implementations


Shortlist of 22 “Structured Data” Reporting Frameworks

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‘Structured Data’ Reporting Frameworks impose Regulatory Reporting in structured templates or predetermined formats.

RankReporting FrameworkStructured

data?Active? EC EB

A

Me

mb

er

Stat

es

EIO

PA

ECB

ESM

A

ESC

B

CEA

OB

SRB

1 CRR/CRD IV Yes Yes X P X X X2 Solvency II Yes Yes X P3 MiFID II/MIFIR Yes No X X P4 IORP Yes Yes P5 EMIR Yes Yes X P6 MIFID I Partially Yes P7 AIFMD Yes Yes P8 CSDR Yes Yes X X X P9 Transparency Directive Partially Partially P

10 Statutory Audit Regulation (SAR) Partially Yes X X P X X11 SRM Yes Yes X X X P12 SFTR Yes Partially P X13 NEW DGS Directive Yes Yes X X P14 AoIU Partially Yes P15 PRIIPs Regulation Partially Partially X P X16 Short Selling Regulation (SSR) Yes Yes X P17 BRRD Yes Yes X P X X18 UCITS (IV) Directive Partially Partially X P19 MCD Partially Partially X P X20 Credit Rating Agencies Regulation/Directive CRAR/CRAD Yes Yes X P21 UCITs (V) Directive Partially Partially X X P22 Market Abuse Directive/Regulation (MAD/MAR) Yes Partially X P


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The challenge.

…

22 REPORTING FRAMEWORKS

Can one team solve this puzzle ?

Burden

Multiple deciders

Completeness check

Complexity

80.000+ Datapoints

Multi-stakeholder

Changing

The challenge


In order to safeguard the stability of the European Union's financialsystem, reporting burden must be contained by striving for a“report once” principle, which will lead to more efficient reportingof financial data, more efficient monitoring of the financial system(banks, insurance companies, and financial markets) and betterrisk assessment by Supervisory Authorities.

For this, it’s necessary to first centrally “define once” the contentsof reporting frameworks by creating one Core SupervisoryVocabulary which acts as pivotal stone and enables RegulatoryAuthorities to control overlaps with existing and emergingreporting frameworks in a self-improving philosophy.

Vision of the FDS project

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How to achieve the goals

Organise initiatives at the center of the Regulatory Scene,

involving :

✓ Stakeholders from regulating authorities

✓ Representative stakeholders from the regulated entities

✓ European public body in charge of standardization

leveraging on European initiatives :

✓ European Interoperability Framework (EIF)

✓ ISA² on Interoperability Solutions

✓ Core Business Vocabularies

... going for self-improving mechanisms.18


European Interoperability Framework (EIF)for European public services

19


What is a core vocabulary?

Simplified, re-usable, and extensible data models that capture the fundamental characteristics of a data entity in a context-neutral and syntax-neutral fashion

See also:e-Government Core Vocabularies Handbook

https://joinup.ec.europa.eu/asset/core_vocabularies/asset_release/core-vocabularies-v20

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https://joinup.ec.europa.eu/site/core_vocabularies/Core_Vocabularies_user_handbook/ISA Hanbook for using Core Vocabularies.pdf

https://joinup.ec.europa.eu/asset/core_vocabularies/asset_release/core-vocabularies-v20


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Define once.


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Basic initiative: core vocabularies


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Example of one link in a reporting template(simplified and partial view)

CRDIV FRAMEWORK

Data Point Model

TAXONOMY

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE

http://europa.eu/site/c

ore_vocabularies/...

Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...

Id Link Label (en)

FAFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Carrying

amount

FCFDBEDB-FA54-1a25-

FGA3-C2341DA155BE



Assets

CBFACDDB-DC17-48ab-

B8A3-B2311DA155BE



Central Banks

ABCBFACDDB-DC17-22-

GZA3-B211DA155BE



Cash and cash

balances

FFRT34CDDB-DC17-22-

A34A3-B211D1235BE



Domestic

activities

... ... ...


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The path to one Core Supervisory Vocabulary

Financial Data Standardisation Project -...

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