ESMA report on the quality and use of data

The European Securities and Markets Authority (ESMA) has published its 2024 report, along with a press release, on the quality and use of data, showcasing significant increase in data use by authorities. The report covers datasets from the European Market Infrastructure Regulation (648/2012) (EMIR), the Securities Financing Transactions Regulation ((EU) 2015/2365) (SFTR), the Markets in Financial Instruments Regulation (600/2014) (MiFIR), the Securitisation Regulation (2017/2402/EU), the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and the Money Market Funds Regulation ((EU) 2017/1131) (MMF Regulation). This edition also expands the scope to include the European Single Electronic Format (ESEF) data and short-selling data. The report is divided into different sections.

• Section 3 highlights how ESMA and other regulatory authorities utilise data for various purposes and projects including: (i) use of aggregated data to identify emerging trends and risks either at EU, national or sectoral level and make such analysis public; (ii) use of granular data to investigate a specific event or entity's behaviour; and (iii) sharing of data between authorities to support specific projects, based on bilateral agreements or existing regulatory provisions. This section also discusses the impact of reutilising existing data to support reporting burden reduction.
• Section 4 focuses on data quality key developments, highlighting the main outcomes on the tool and technology supporting the data quality work.
• Section 5 discusses, for the first time, enforcement and sanctions, detailing ESMA's consolidated sanctions report for enforcement activities related to data quality. It concludes that overall, there is still room for greater convergence among NCAs in the exercise of their sanctioning powers. Although noting that sanctions are only one of the multiple tools in the NCAs supervisory and enforcement toolkit, and supervisory effectiveness cannot be measured solely by the number of sanctions imposed.
• Section 6 outlines the next steps ESMA plans to take in enhancing the monitoring of data quality and fostering the use of it in line with the objectives included in the ESMA Data Strategy 2023-2028. ESMA emphasises enhanced cooperation with NCAs to improve data quality and visibility. It also highlights the importance of leveraging technological innovations and reducing reporting burdens to achieve ESMA's objectives.

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