Representatives of the European Parliament and EU member states on Tuesday (23 May) agreed on an EU regulation to establish a single point of access for individuals and companies to digitally and freely access financial and sustainability-related information about European companies.

As a part of the EU’s action plan towards achieving a Capital Markets Union (CMU), the European Single Access Point (ESAP) should facilitate the cross-border circulation of company information and thus also encourage cross-border investments.

“We are about to create a platform which will make it much easier to find and compare investment products and companies,” Swedish Minister for Finance Elisabeth Svantesson said in a statement, calling the agreement “good news both to European businesses as well as investors worldwide.”

The EU Commission originally proposed the regulation in November 2021 as a part of its CMU package. EU member state finance ministers had found a common position by the end of June 2022, whereas the European Parliament only fixed its position this March.

Against market-fragmentation

Concluding the negotiations on the ESAP was one of the goals that the Swedish Presidency of the EU Council hat set itself in financial regulation.

Representing the position of EU member state governments, the Swedish Presidency now achieved that goal by finding an agreement with the European Parliament’s negotiating team that the Portuguese Social Democrat Pedro Silva Pereira led.

“I am particularly pleased that we were able to secure a broadened scope of ESAP, which now covers important green and crypto legislation,” Silva Pereira said in a statement.

“This EU-wide digital data space holds the potential to address the great challenge of capital market fragmentation that we still face today,” he said.

EU Commissioner Mairead McGuinness, responsible for the regulation of financial markets, initially presented the proposal one and a half years ago, congratulated the negotiators via Twitter.

No additional reporting requirements for businesses

Both the Council and the Parliament stressed that there would be no additional reporting requirements for companies due to this law. The ESAP is only supposed to gather publicly available data that companies have to publish anyway due to other legislation, for example, the Corporate Sustainability Reporting Directive.

Both consumer organisations and some industry associations advocated in favour of the ESAP.

For example, Insurance Europe, the association representing European insurance companies at a European level, said that the ESAP could “play a key role in helping to close the current data gap, particularly on sustainability matters” in a short position paper published in April.

“It will allow insurers, Europe’s largest institutional investors, to access robust, comparable and reliable financial and environmental, social and governance (ESG) data,” the paper went on to say, arguing that the digital format would help insurance companies “steer their investment portfolios more effectively towards sustainability objectives.”

A long way off

There is a catch, however.

If an interested investor searches for the ESAP tomorrow, she will not find the easily accessible online database just yet, nor will she next year.

In a first step, the EU Council and the EU Parliament have to officially approve the deal negotiated on Tuesday. This will hardly be a stumbling block, and the regulation will likely enter into force this summer.

Starting from then, it will take four years (42 months) before the ESAP will be made available to the public, likely in the summer of 2027.

The ESAP will then be gradually phased in, starting with data according to the short-selling, prospectus, and transparency directives. Six months later, additional data will be made available, among which will also be some sustainability-related disclosures. Later still, data from other EU legislations, like the EU Green Bond Standard, will be available through the ESAP.

Read more with EURACTIV

Green industry law haunted by old conflicts over nuclear, financing

The European Commission’s proposal for a Net-Zero Industry Act (NZIA) received broad support from EU ministers in charge of competitiveness on Monday (22 May), but unresolved conflicts on nuclear power and EU-level financing could make the upcoming negotiations difficult.