Reporting

Overview: 

The current global reporting ecosystem consists of many different actors and reporting frameworks, including the different national and international requirements. Investment firms are often required to comply with multiple reporting obligations, such as the SEC Form PF, CFTC Form CPO-PQR, AIFMD Annex IV, etc. The development of separate reporting frameworks to fulfil different needs has, in many instances, led to overlaps in data requested and ad hoc requests and national requirements have offset the benefits a single set of harmonised reporting requirements across, in particular, the EU.

Current work:

AIMA has advocated with various supervisory authorities to reduce the reporting burdens by simplifying systemic risk reporting requirements while still accomplishing policy goals to provide useful information for supervisory authorities. In general, we support initiatives that are aimed to identify ways to streamline reporting requests and processes by increasing the efficiency of reporting by standardising reporting, reducing redundancies and using common definitions. More coordination and data sharing among authorities is needed to avoid overlapping requests.

The European Commission has published a proposal to establish a European Single Access Point (ESAP). The main objective of the proposal is to contribute to integrating the European financial services and capital markets by providing an easy, centralised access to public information about entities and their products. Concretely, the ESAP aims to establish a centralised repository system to access (i) key information which must be disclosed according to existing EU legislation and (ii) additional categories of information, including financial or sustainability-related information, voluntarily disclosed by stakeholders. AIMA has prepared a summary of the ESAP package. Earlier this year AIMA responded to the Commission's consultation on the establishment of the ESAP. Our main position was to ensure that whatever data gets reported or filed with ESAP is already public, should follow the 'file-only-once' principle, and that the ESAP only deals with the collection of already publicly available data rather than requiring the publication of data that is now private or reserved to supervisors. The Commission has taken this onboard as the proposal will not add or modify current reporting obligations, nor will it require entities to publish information that is otherwise not required to be publicly disclosed. AIMA will review the proposals in detail and will look to share its position with the European Council and European Parliament as they prepare for their legislative debate.

The European Banking Authority has published its final report on their feasibility study of an integrated reporting system across the EU. The initial discussion paper outlined possible options for the creation of an integrated system, including a single data dictionary and single reporting system aiming to increase the efficiency of the reporting process for authorities and institutions alike and influence the evolution of the entire financial services reporting landscape. The EBA concludes that a more integrated reporting system could be feasible to achieve, considering that the level of integration depends on the fulfilment of necessary conditions, including a positive balance of costs and benefits, as well as an adequate allocation of resources, adequate level of integration of data definitions in the common data dictionary, the implementation of necessary changes to the legal framework and stakeholders buy-in. The EBA also refers to the EC's Supervisory Data Strategy (see below). 

Upcoming actions: 

The EC has adopted its Supervisory Data Strategy, an initiative that was originally part of the CMU package published in November 2021. The Strategy aims to modernise the EU supervisory reporting and put in place a system that ensures supervisory authorities at EU and national level have better access to data and data sharing. The EC proposes a gradual approach to reduce implementation risks and costs through a range of building blocks and actions, including by (i) increasing the consistency and standardisation of data; (ii) better data sharing among authorities; (iii) improving the process for developing and adopting reporting requirements; (iv) establishing a joint governance and implementation framework; and (v) promoting the use of modern technologies. The EC will produce a report in 2023 on the progress made and lessons learned from the initiatives and it will also indicate whether additional measures/actions are needed.

In addition, the European Commission has published its AIFMD proposal. The Commission is removing the "limitations" to data reporting (for example, referring to "instruments traded", rather than "the main instruments traded"), which could pave the way for full portfolio reporting. The Commission, which was the only institution tasked to detail the AIFMD reporting requirements, is now empowering ESMA to amend the Annex IV reporting template, including the frequency of reporting. ESMA is also tasked to take into account other reporting frameworks and to reduce duplications.

The Securities & Exchange Commission has proposed amendments to enhance private fund reporting on Form PF.  Large hedge fund advisers (i.e., $1.5 billion AUM or higher) would be required to file current reports within one business day of the occurence of one or more major reporting events. In light of the March 2020 and January 2021 market turmoil, a new Section 5 is added which covers a range of events and also incorporates objective tests to allow advisers to determine whether a report must be filed. These events include: (i) extraordinary investment losses; (ii) significant margin and default events; (iii) material changes in relationship with prime broker; (iv) changes in unencumbered cash; (v) operation events; (vi) withdrawals and redemptions; and (vii) explanatory notes. According to the SEC, the amendments will provide them with the ability to assess systemic risk as well as to bolster its regulatory oversight of private fund advisers and its investor protection efforts. There will be a 30-day comment period following publication in the Federal Register. AIMA will seek input from members and intends to provide formal comment to the SEC.

(Last updated: 28 January 2022)