On Wednesday 15 December, the European Commission presented a new strategy to modernise financial reporting requirements for prudential supervision.
This strategy, which contributes to the achievement of the capital markets union, is based on the following elements: (1) ensure consistent and standardised data based on common terminology and formats: the Commission will in particular decide in 2023 on the appropriateness of generalising the Legal Entity Identifier (LEI) for parties to financial transactions; (2) facilitate the sharing and re-use of data between authorities in order to avoid redundant requests: the Commission will assess the appropriateness of creating a single supervisory data space; (3) improve the quality of reporting requirements; (4) improve cooperation between supervisory authorities through joint governance arrangements; (5) promote the use of new technologies.
On this last point, the Commission notes that distributed ledger technologies (DLTs) have the potential to enable supervisors to monitor transactions in real time and to allow them to extract transaction reports directly from trading systems, rather than waiting for the transaction parties to send reports. Recently approved (see EUROPE 12840/7), the DLT pilot scheme will provide an opportunity to assess the benefits of using this technology for financial reporting purposes.
See the Commission communication: https://bit.ly/3GT4vW7 (Original version in French by Mathieu Bion)