Autor: karl

In December 2023, the European Central Bank (ECB) initiated a public consultation process for the revision of the ECB Regulation on investment fund statistics. Additional reporting obligations for investment funds are introduced as part of the revision. Specifically, an extended breakdown of data on the balance sheets of investment funds is required. Additionally, mandatory disclosures of costs and adjustments in the reporting logic of financial derivatives are foreseen.

Use Case: The ECB investment fund statistics and FundsXML in Austria

The ECB’s reporting requirements in Austria are integrated into the Austrian National Banks (OeNB) reporting obligations of investment funds. FundsXML has been successfully used for many years to meet the ECB investment fund statistics obligations. The processing is centrally managed through a system operated by Austrian Control Bank (OeKB) – the OeKB Fund Data Portal. The OeKB Fund Data Portal allows investment fund management companies to exchange fund data via an electronic platform in the FundsXML format. Notably, the data usage for the ECB investment fund statistics reporting is controlled entirely by the reporting investment fund management companies through a simple authorization concept.

Subsequently, the OeKB transmits data for domestic investment funds to the OeNB. As this data transmission must meet specific minimum requirements set by the OeNB, the OeKB only transmits the aggregated reports after the data has been checked using validation rules and no validation rule errors are found.
The above procedure ensures a fully automated process that reduces the administrative burden on investment fund management companies in providing data and reduces the risk of human error.

The European Single Access Point (ESAP) is a flagship action of EU policymakers for improving access to centralized financial and sustainability information. The draft technical standards, which the European Supervisory Authorities published in mid-January 2024, outline the roles of data collection bodies as well as the ESAP-functions themselves. As Asset Managers navigate the complexities of ESAP compliance, embracing FundsXML as the data exchange standard can streamline processes, reduce errors, and enhance data quality.

Before delving into the synergy between FundsXML and ESAP, let’s briefly highlight some key aspects of the ESAP technical standards:

1.   Acceptable data formats: The technical standards specify selected formats for transferring machine-readable information. XML is an accepted format for the transfer of machine-readable information. 

2.   Automated validations: The technical standards emphasize the role of automated validations performed by the data collection bodies — a process intended to ensure data consistency and compliance. Where required, validations are to be performed regarding aspects such as the data format, metadata, and the Qualified Electronic Seal.

3.   Metadata requirements: Metadata plays a pivotal role in ESAP’s functionality, enabling efficient data retrieval and processing. The technical standards define the characteristics of the expected metadata (ANNEX I).

4. Qualified Electronic Seal (QES): QES shall ensure appropriate levels of authenticity of various ESAP-information. The technical standards mention three possible formats of seal be recognized within the EU. Among them, the XAdES (XML Advanced Electronic Seal) Baseline Profile underscores the increasing relevance of the XML format regulatory landscape. 

5. Open standard licences: The ESAP technical standards specify the open standard licenses that allow free use, modification, and sharing of that information by anyone and for any purpose. Creative Commons licenses are mentioned as examples of recommended licenses for making data available to ESAP.

FundsXML can enable ESAP compliance. Here is why:

Automated data validation: A core requirement of ESAP is the automated validation of data by national collection bodies. FundsXML can facilitates this process by enabling financial institutions to validate data before submission to national ESAP collection bodies.

Flexibility: FundsXML is maintained and updated by the FundsXML community, ensuring that the standard remains relevant and valuable in the face of evolving industry needs and regulatory requirements. Already now, by using FundsXML, Asset Managers can transfer fund documents such as the PRIIP KID and corresponding metadata in a consistent, structured data format. Given the ESAP regulation, the FundsXML format’s user-centric continuous development allows the creation of new custom XML data fields (tags). Regarding ESAP, the European FundsXML „Working Group on Content and Technique“ is currently evaluating steps to incorporate necessary metadata and fund documents within the FundsXML schema.

Data Integrity: By empowering the usage of QES, the ESAP regulation stresses the importance of data authenticity. The FundsXML format allows for the usage of XML signatures, ensuring authenticity throughout the data exchange process.

Compliance with the ESAP regulation is not an option but a necessity. FundsXML can emerge as your ally in this journey.

The European Commission’s Digital Operational Resilience Act (DORA) has set a new benchmark for financial sector fortitude. A critical aspect of this mandate is the unyielding protection of sensitive data by employing cryptographic controls.

In particular the proposed DORA RTS Article 6 on „Encryption and cryptographic controls„

2. (a) … rules for the encryption of data at rest, in transit and,
   where relevant, in use, taking into account the results of the
   approved data classification …

This is an area where FundsXML emerges as a solution that excels in the face of new potential regulatory requirements. FundsXML’s architecture is designed to be compatible with state-of-the-art encryption, which means that it naturally aligns with DORA’s objectives to safeguard against cyber threats.

By leveraging FundsXML’s encryption capabilities, your company will not only be defending its data assets but will also be showcasing a proactive stance in operational resilience. In this light, FundsXML isn’t just a compliance measure — it’s a competitive advantage.

Introducing our newest feature on the FundsXML Website: A dedicated section for you to share your invaluable suggestions on how we can enhance the FundsXML schema or improve the overall user experience on our website.

By clicking on the Request a feature button in the header, you’ll be directed to the submission form.

Your feedback is highly valued and greatly appreciated!