Common data strategy critical for CMU success says ESMA

ESMA is calling for all relevant authorities in the CMU project to adopt a uniform approach to data.
By Paul Walsh
A shared data strategy is critical to the success of the European Commission’s (EC) Capital Markets Union (CMU) project, according to the European Securities and Markets Authority (ESMA).

In response to the EC’s consultation on CMU launched earlier this year, ESMA has described transparency and data availability as “essential elements” of CMU as they help reduce fragmentation of capital markets and facilitate cross-border supervision.

The authority also calls for the creation of “a common data strategy” among all relevant authorities.

Such a strategy would, according to ESMA, reduce compliance costs for reporting entities as well as enhance the capability of financial authorities’ data collection methods.

In addition, ESMA has called for an increased outlook on how authorities can accommodate financial innovation with technologies such as blockchain potentially impacting data strategies.

Initially proposed by the EC in 2015, CMU had sought to harmonise a number of EU processes and introduce mechanisms to boost non-bank lending into the real economy.

The CMU action plan was proposed shortly after this and prioritised increased investor opportunities, a single market for all 28 member states and more resilience and competition within the financial system.

In September 2016, the Commission called for urgency in the implementation of the CMU action plan to “have an effect on the ground.”

The EC also stressed how FinTech has the power to “transform” EU capital markets and that the CMU must keep pace with technological developments.

A mid-term review on the status of the CMU project is expected in June.