EBA Reporting Framework 4.0: Data Point Model (DPM) 2.0

On 23 October 2024, the European Banking Authority (EBA) released the first draft of its technical package for the EBA 4.0 reporting framework. This release marks a pivotal moment in regulatory reporting across the European financial sector. Designed to ease the transition to the new Data Point Model (DPM) 2.0, the draft provides preparatory materials for institutions ahead of the final release, expected in December 2024.

With EBA reporting framework 4.0, institutions will need to meet new reporting obligations starting from the first half of 2025. This framework is closely aligned with updates stemming from the EU Banking Package, including CRR3 and CRDVI, as well as reporting changes related to digital assets like asset-referenced tokens (ARTs) and electronic money tokens (EMTs).

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The EBA releases a first draft of the technical package for its 4.0 reporting framework

The European Banking Authority (EBA) published today a draft technical package for version 4.0 of its reporting framework. This publication aims to provide an early version of the 4.0 release given that its reporting obligations will apply as of the first half of 2025. This package, whose final version will be released in December 2024, will facilitate a smoother transition to the new data point model (DPM) semantic glossary and the capabilities of the DPM 2.0 model.

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The EBA releases a first draft of the technical package for its 4.0 reporting framework | European Banking Authority

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The Shift to Data Point Model (DPM) 2.0

One of the key innovations in the EBA reporting framework 4.0 is the migration from DPM 1.0 to DPM 2.0. First announced in June 2024, this shift introduces a more granular and automated system for regulatory reporting. The DPM 2.0 model offers enhanced metadata management, new validation and calculation capabilities, and a dynamic, versioned glossary.

Key features of DPM 2.0 include:

• Glossary Management: The glossary now supports versioning, allowing financial institutions to easily track changes in reporting requirements. The dynamic structure lets users organize categories, properties, and subcategories into complex items for more efficient reporting.
• Template and Metadata Enhancements: New templates with versioned headers and improved grouping capabilities help streamline data processing. These enhancements allow institutions to model complex relational data more effectively.
• Validation and Calculation Engines: Automated validation and calculation features within DPM 2.0 ensure machine-readable submissions, reducing manual efforts and enhancing data accuracy.

Key Features of EBA Reporting Framework 4.0

The EBA reporting framework 4.0 introduces several technical innovations aimed at improving the regulatory reporting process. The main reporting obligations include:

1. Reporting by Issuers of Asset-Referenced Tokens (ARTs) and Electronic Money Tokens (EMTs):
   • The framework includes specific updates to reflect the regulatory oversight required for ARTs and EMTs, which are increasingly relevant in the digital finance landscape.
2. COREP Template Updates (Driven by CRR3 and CRDVI):
   • Significant changes to COREP templates have been introduced to align with the requirements of Capital Requirements Regulation (CRR3) and Capital Requirements Directive (CRDVI), ensuring consistency with the broader EU regulatory framework.
3. Amendments for Class 2 Investment Firms:
   • Minor amendments to reporting obligations for Class 2 investment firms streamline processes and ensure alignment with the recent updates to CRR3/CRDVI.

The draft technical package also includes a dual-format data dictionary (supporting both DPM 1.0 and DPM 2.0). This dual support will remain available until the end of the transition period in December 2025, ensuring that institutions can adapt smoothly to the new model.

DPM 2.0 Resources for the Transition

To assist stakeholders with the transition to DPM 2.0, the DPM Query Tool has been updated. This tool enables institutions to query the newly updated DPM 2.0 taxonomy, ensuring that their data submissions meet the EBA reporting framework requirements.

Additionally, the EBA has released a conversion file between DPM 1.0 and DPM 2.0. This file is essential for institutions needing to understand the mapping between old glossary elements (such as domains, dimensions, and hierarchies) and the new categories, properties, and items introduced in DPM 2.0. It provides clear documentation of the changes and ensures that stakeholders can seamlessly transition between the two versions.

Timeline and Key Milestones for Transition

The transition to DPM 2.0 will be completed by December 2025. During this period, both DPM 1.0 and DPM 2.0 will be supported, giving institutions flexibility in their reporting processes. However, after December 2025, only DPM 2.0 will be accepted for all regulatory submissions within the EBA reporting framework.

Key milestones include:

• December 2024: The final version of the EBA 4.0 reporting framework technical package will be published, incorporating feedback from stakeholders and adjustments from the three European Supervisory Authorities (ESAs).
• First Half of 2025: Institutions must start submitting data using the DPM 2.0 model, aligning with the new reporting obligations.
• December 2025: The transition period ends, and only DPM 2.0 submissions will be accepted for all reporting requirements.

Impact of the EBA Reporting Framework on DORA

The EBA 4.0 reporting framework also addresses reporting obligations under the Digital Operational Resilience Act (DORA). The draft technical package, released in October 2024, did not yet reflect the changes proposed by the European Commission (EC). These updates will be incorporated into the final release in December 2024, ensuring that financial institutions meet the operational resilience requirements related to their ICT third-party service providers.

Validation Rules and the Introduction of DPM-XL

Another critical advancement in the EBA reporting framework 4.0 is the introduction of the DPM-XL standard for validation rules. This new language enhances the efficiency and security of the validation process. The DPM-XL system allows for the automated handling of validation rules, making the process more scalable and less prone to errors.

Additionally, all historical validation rules will be consolidated into a single document. This new approach gives institutions better visibility into the changes and applicability of validation rules over time, streamlining their reporting processes.

Future Impacts of the EBA Reporting Framework 4.0 and DPM 2.0

The release of the EBA 4.0 reporting framework and the full transition to DPM 2.0 will have a transformative impact on regulatory reporting across the European financial landscape. The future implications of these updates are far-reaching:

1. Enhanced Data Precision and Consistency:
   • The DPM 2.0 model introduces more structured and precise reporting. By supporting a dynamic glossary, financial institutions will be better equipped to handle evolving regulatory requirements, ensuring consistent and accurate data submissions across the EU.
2. Improved Automation and Efficiency:
   • With enhanced validation and calculation engines, institutions will benefit from increased automation. This reduces the manual burden on compliance teams and improves reporting speed, freeing up resources for more strategic tasks such as data analysis.
3. Future-Proofing for Digital Finance:
   • By integrating updates for digital assets like ARTs and EMTs, the EBA 4.0 reporting framework positions institutions to remain compliant as the regulatory landscape adapts to the growing influence of digital finance. Similarly, the DORA-related updates ensure institutions are ready to manage operational risks from ICT providers.
4. Smoother Transition for Institutions:
   • The phased approach to implementing DPM 2.0, with the transitional period extending to December 2025, provides institutions with ample time to adjust their systems and processes. This approach mitigates disruption and allows for a smoother, more gradual transition.
5. Broader Implications for Data Analytics and Regulatory Supervision:
   • The DPM 2.0 framework will enable more granular and standardized data reporting, which, in turn, will enhance the ability of both institutions and regulators to analyze and assess risks. Over time, this will contribute to a more data-driven regulatory environment, promoting proactive risk management.
6. Global Cooperation and Standardization:
   • As EBA reporting standards align with other global frameworks, multinational institutions will benefit from harmonized reporting requirements, simplifying cross-border operations and promoting global data-sharing among regulators.

A Forward-Looking Reporting Framework

The EBA reporting framework 4.0, coupled with DPM 2.0, provides a solid foundation for the future of regulatory reporting. By embracing these updates, financial institutions can not only meet their compliance obligations but also unlock opportunities for improved data management, operational efficiency, and strategic insights.

As we approach the final deadline for the transition to DPM 2.0 in December 2025, the financial sector will experience a more streamlined, automated, and precise reporting process, ultimately fostering a stronger, more resilient financial system across the European Union.