EBA and ESMA support EU Digital Finance Strategy

Posted on July 3, 2020 by Editor

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have called for further standardisation of data and the use of digital entity identifiers in their responses to the European Commission’s consultation on a new EU Digital Finance Strategy.

The strategy aims to highlight a number of policy areas that can help Europe grasp the full potential of the digital era, especially in the financial sector.

EBA and ESMA both expressed strong support for the strategy while recommending that further steps be taken.

ESMA argues that promoting the use of unique, standardised digital identities, specifically the Legal Entity Identifier (LEI) would help accelerate harmonisation and security. They highlight the potential for embedding the LEI within ESEF reports and electronic signatures, pointing to GLEIF’s recent annual report, developed with some support from XBRL International.

Both EBA and ESMA also encouraged increasing the machine readability and standardisation of data across the EU to enable a data-driven technology sector that can efficiently and easily utilise the data available. While the ESEF mandate goes some way to requiring machine-readable data to be reported, ESMA encouraged further digitisation of reporting, including via the review of the Non-financial Reporting Directive and of Key Information Documents (KIDs).

Read EBA’s response here and ESMA’s response here.

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