See the piles of paperwork shrink? The European Parliament has moved to simplify financial reporting for institutions within the EU’s financial services and investment sectors. It is part of a broader effort to ease administrative burdens and improve data sharing among EU regulatory authorities.
The EP plenary session approved on October 7th a regulation „amending certain financial services and investment support Regulations as regards certain reporting requirements“. Despite the title, the initiative—conducted under procedure 2023/0363(COD) with MEP Paulius Saudargas (EPP/LTU) as rapporteur—is to streamline multiple regulations that regulate financial reporting.
We all do agree that one of the main challenges of the European Union is administrative burden. — MEP Paulius Saudargas (EPP/LTU)
“We all do agree that one of the main challenges of the European Union is administrative burden,” Mr Saudargas said before the vote. “So if we want to cut red tape in the financial sector, we have the chance to do it now by adopting this legislation without a delay.”
The new rules do so primarily by harmonising and, where feasible, reducing the volume of data financial institutions and investment funds must submit. The aim is to make compliance less cumbersome and more consistent across the various sectors. This alignment seeks to grant authorities such as the European Systemic Risk Board (ESRB), European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA) access to high-quality, standardised information. Such data is crucial for monitoring financial stability and assessing risks at both national and European levels.
Reduce redundancy
The regulation also introduces stronger legal foundations for sharing this data among competent authorities. It explicitly compels these bodies to exchange information obtained through European or national reporting channels. In addition, if they choose, authorities may share relevant datasets with financial institutions, researchers, or other entities with a legitimate interest.
These provisions aim to reduce redundant reporting requests when multiple authorities need similar data, easing the burden on reporting entities. The European Economic and Social Committee (EESC) has praised these data-sharing measures and the drive towards reducing administrative requirements, while acknowledging that implementing changes might bring some additional costs linked to standardisation efforts.
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Furthermore, the amendment simplifies reporting requirements for those implementing InvestEU and similar investment programmes. Reporting frequency will drop from twice yearly to once annually, reducing paperwork and enhancing transparency and accountability regarding the use of EU funds dedicated to economic development.
Accountable, predictable
The initiative spells out that regular reviews of reporting obligations must become mandatory, ensuring future over-complexity is avoided. Competent authorities are now required to specify details of information exchanges in formal memoranda of understanding—a practical change that makes cooperation more accountable and predictable.
The provisional agreement reached in December 2024 broadened the scope to include key actors like the Single Resolution Board, the Single Supervisory Mechanism, as well as the Anti-Money Laundering Authority (AMLA). Within five years of the measure’s entry into force, the European Supervisory Authorities and relevant bodies must prepare a report assessing the feasibility of an integrated reporting system. This system would potentially allow authorities across the Union to further reduce reporting duplications by accepting a single submission that satisfies all.
Overlaps, contradictions gone
A key practical effect is the expected relief for financial institutions and investment managers. The simplification move should make compliance clearer and less taxing, removing overlapping or contradictory demands. Equally, it aims to guarantee supervisors receive consistent and reliable data suitable for informed decision-making, an essential foundation for effective regulation and crisis prevention.
This measure fits within a wider regulatory reform trend. For example, related simplifications of sustainability disclosure rules have broadly reduced detailed data points and postponed certain reporting obligations to alleviate burdens on smaller firms and non-financial entities, without compromising transparency.
Though largely technical, the regulation carries significant implications. It clarifies and strengthens the legal architecture for reporting and data exchange. It promises gains for regulators, supervised entities, and ultimately EU taxpayers who rely on a stable and well-supervised financial system. In a domain often criticised for excessive paperwork and bureaucratic complexity, this regulation signals a step towards pragmatism and coherence.
Details vs simplicity
As Mr Saudargas and his colleagues advance this reform, their work faces the challenge of marrying detailed oversight with simplicity. They have acknowledged that “consistency and standardisation across legal frameworks and jurisdictions, and over time, can make requirements more workable without affecting the actual content of reporting standards.” This shows a clear commitment to ensuring that simplification does not dilute regulatory effectiveness.
In sum, the Parliament’s vote on 7 October brings the EU closer to a financial reporting framework that is streamlined, coordinated, and better suited to the Union’s complex and integrated economy. With final adoption imminent, the measure marks a notable milestone in the ongoing effort to modernise and rationalise European financial regulation.
The amendments won approval of Parliament’s ECON committee at early 2nd reading on 19 March 2025. Tuesday’s plenary confirmed it; the final text is now to come out in the Official Journal of the EU.
