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News 25/03/24

More effective supervision by centralising financial supervision data in Europe

Centralising capital markets data in Europe offers numerous advantages like enhancing regulatory effectiveness and fostering cross-border cooperation. In a position paper presented today The Dutch Authority for the Financial Markets (AFM) explores the key reasons why centralising financial supervision data in Europe is beneficial. 
In an increasingly interconnected financial landscape, the consolidation of capital markets data allows for a more comprehensive understanding of risks, facilitating timely responses to emerging challenges.

Key messages:
  1. Centralisation of capital markets data leads to more efficient supervision, better cross-border cooperation and more comprehensive understanding of risks
  2. Centralising data improves efficiency of regulatory processes and reduces the dependency on complex systems for individual regulators.
  3. For effective centralisation of data certain conditions need to be met, including centralised data delivery and processing, a central definition of data quality requirements and ensuring central facilities for national competent authorities to access and analyse data.
  4. The AFM suggests a phased approach for centralization, starting with new data flows resulting from new legislation and data flows where centralisation can significantly improve quality and efficiency and data on financial products that transcend national boundaries.
  5. Centralising reporting of capital markets data in Europe significantly enhances efficiency and compliance for supervised institutions, while at the same time streamlining reporting and reducing administrative burden.

More effective supervision

The AFM sees significant advantages in centralising data delivery and data processing at a central European level. Supervisory objectives can be achieved more effectively if authorities have an integral data set at a central European level. Also, central data collection is more efficient because no national data infrastructures are needed for receiving and processing data and, in addition, inefficient data exchange between regulators is not required. For financial institutions, the advantage is that they only need to provide data in one place. Also, a more integrated European capital market benefits from data storage on a supranational European level.

Integrated European Capital Markets Union

Centralisation of capital markets data is closely aligned with the goals of the Capital Markets Union (CMU) in the European Union. In view of our continued support for a deeper and more integrated European Capital Markets Union (CMU), the AFM and De Nederlandsche Bank (DNB) recently presented next steps to shape the right policies and create a competitive European capital market.

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