From fragmented reporting to digital sovereignty : A case for an EU Financial Data Act

Abstract

This paper proposes a strategic shift in European Union (EU) financial regulation, advocating for the EU Financial Data Act (EU FDA) as the superior mechanism for reducing regulatory burden and strengthening supervision. The root cause of industry inefficiency lies in the fragmented data collection architecture, not a deficit of supervisory authority. Despite significant efforts by the European Securities and Markets Authority (ESMA) to standardise reporting fields (eg Markets in Financial Instruments Regulation [MiFIR], European Market Infrastructure Regulation [EMIR], Securities Financing Transactions Regulation [SFTR]), the obligation to ‘report many times, differently’ persists, imposing substantial IT and compliance costs. The EU FDA would execute the ‘report once’ principle by mandating a single EU Reporting Data Dictionary and centralising submission to an ESMA central data reporting and storage facility, a single reporting mechanism. The paper proposes a streamlined data utility, coupled with ESMA-centralised advanced data analytical tools housed within a Sovereign EU Data Centre (SEDAC), which would achieve three critical outcomes: (1) measurable burden reduction for companies through elimination of duplicative reporting and the use of artificial intelligence (AI) for pre-submission error validation; (2) robust supervisory convergence by standardising analytical methodology across all national competent authorities (NCAs) and enabling real-time, cross-sectoral risk analysis (eg linking MiFIR and EMIR data); and (3) constitutional safeguarding and digital sovereignty by ensuring sensitive financial intelligence is legally and operationally protected on EU soil. Critically, this approach is fundamentally superior to current calls for broad centralised supervision. Centralised data fixes the foundational inefficiency, empowering existing supervisors with high-quality intelligence, whereas centralising authority risks creating a new layer of bureaucracy without enhancing the quality of supervision itself. The EU FDA is thus the essential legislative foundation for an intelligence data-driven and efficient European supervision, and sovereign future for the European Capital Markets and Savings and Investments Union (CMU SIU). This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/ business/.