Design of EU open finance rules set to move to next stage

The EU plans to require financial services firms to open up the data they hold for customers. Last year the European Commission proposed draft regulatory framework for this data-sharing. Now the European Council and Parliament have agreed their positions on the proposal, opening the door to more detailed negotiations to begin next year.

The regulation on financial data access, known as FIDA, would require financial institutions to join financial data sharing schemes. These schemes will then develop common standards for sharing access to different types of customer data between regulated firms. The regulation also creates a new licensing regime for providers of financial information services.

As the EU’s co-legislators develop their plans, some key points to keep an eye on are scope, application and timing.

• The most obvious use cases for Open Finance relate to retail consumers of financial services. The Commission’s original text, however, did not limit the scope in this way, suggesting that the requirements may apply to data held for professional and corporate clients too. The Parliament proposes narrowing the scope to natural persons and micro, small and medium enterprises.
• FIDA will apply to a wide range of financial institutions including EU banks, insurers, investment firms, asset managers, payment firms and cryptoasset service providers. The Parliament proposes bringing operators of payment schemes into scope as well. There are also technical differences between the co-legislators on the customer data that will be subject to the FIDA framework.
• The Commission suggested that firms would need to have joined data sharing schemes within 18 months of the regulation coming into force. Both the Parliament and Council have suggested giving the industry more time. The Council has also suggested phasing in FIDA at different times for different types of customer data.

We expect that trilogue negotiations on FIDA will begin in Q1 2025 which should mean that the final text is agreed by the summer.

Client subscribers to the Linklaters knowledge portal can read our briefing note on the Commission’s proposals for FIDA.