Financial Data Standardisation Project (FDS)
“The reason why a project on Financial Data Standardisation (FDS) was launched in order to assess the potential to report financial data more efficiently (at lower cost) and produce better data for risk assessment by the supervision authorities” (EC Staff Working Doc, Call for Evidence – EU regulatory framework for financial services)
In 2016, the European Commission launched the Financial Data Standardisation (FDS) project which contributes to the Union’s vision of a “Digital Single Market“ (DSM) which is currently one of the EC’s high political priorities, Shaping the Digital Single Market (EC). It has been budgeted 3.4 million Euros to produce a “Framework of interoperable financial data reporting standards” by 2019. FISMA: Financial Data Standardisations (EC, 16).
“The following project objectives have been identified:
⦁ Process and share more efficiently financial data by enhancing the interoperability of (existing) data standards
⦁ Reduce compliance costs that arise in the context of legal reporting requirements by applying the “once for all” principle in reporting
⦁ Explore new solutions improving the way data can be used by (and shared between) authorities
⦁ Improve the monitoring of the allocation and evolution of risk in the EU’s financial system” ⦁ FISMA: Financial Data Standardisations (EC, 16)
In December 2018, the European Commission has confirmed its intention to “map all existing supervisory reporting requirements down to the data element level with the aim of identifying gaps, overlaps, redundancies, and inconsistencies” Follow up to the Call for Evidence – EU regulatory framework for financial services (EC, Dec 17)
The Financial Data Standardisation (FDS) project will create “an Inventory of Data Reporting Requirements (DRR) which will cover the legal requirements in terms of reporting together with the identification of stakeholders involved, data standards and IT systems used”.
It will do this with a top down approach (financial regulation down to market) and bottom up approach (financial institutions information flow to regulations). The top down approach will involve “Data Dictionaries which will identify the different data elements that are part of the legal reporting requirements together with their semantic, metadata, structure, business rules and existing standards”. FISMA: Financial Data Standardisations (EC, 16)
The bottom up approach will create “Business Process Models which will map financial institutions information flows (FIIF) using Business Process Modelling Language (BPML). The business processes will start at the data creation (source), transmission across various types of financial instruments from the moment the instrument is generated across all regulatory requirements up until the moment of last regulatory request.” The EC Directorate-General “Financial Stability, Financial Services and Capital Markets Union” (FISMA) believe as a result of this action, all stakeholders will better understand “the impact of new regulations and changes to regulations on data flows” and the “connection between financial regulations” FISMA: Financial Data Standardisations (EC, 16).