The EBF fully supports the intended objective of promoting finance and reinforcing financial integration, with the ultimate aim of creating a true Financial Union, comprising both a Banking Union and a Capital Markets Union. We broadly support the Commission’s objective of supervisory convergence, as it will facilitate further integration of the EU capital markets, remove cross-border barriers and support the wider Capital Markets Union agenda. We believe this process must focus on carefully chosen reforms that offer the best chances of success and strike the appropriate balance between the central and local elements of supervision.
Underlying our approach is our belief that we must build on the current system. The current regime provides a good basis for a well-functioning internal market for capital and financial services and for a continued development of the ESAs’ activities. That in turn speaks for an approach of ‘consolidating successes’ without introducing radical changes at this point of time. By contrast, initiatives to adjust the current setup and enhance the efficiency and coordination of the ESA’s are very much needed and will be welcomed by market participants.
Our main concerns and suggestions are as follows:
- We believe that the proposal must expressly acknowledge that the supervisory authorities’ decisions can have an impact on the wider economy. The Commission should embed in the over-arching responsibilities of the ESAs other equally important policy goals such as the financing of the economy and maintaining the international competitiveness of the EU’s financial sector.
- We believe that the Commission proposal should better reflect the different degrees of supervisory convergence and of integration reached by the sectors in the remit of the ESAs, rather than changing radically the set-up of the supervisory framework for all ESAs.
- We question the transfer of the approval of certain types of prospectus from National Competent Authorities to ESMA, eliminating the benefits of specialised prospectus expertise depending on the different types of financial instruments.
- We do not support the proposed amendments to the way delegation arrangements are currently authorised in the EU. We are concerned that the proposals regarding delegation could develop into a more general restriction on delegation arrangements to third countries.
- Although not included in the proposal, the ESAs should be empowered to remove or temporarily suspend certain obligations under particular and exceptional circumstances. This kind of mechanism would have a similar effect to the “no-action” powers enjoyed by other supervisors outside the EU, such as in the US.
- The changes to the funding mechanism also raise concerns. We believe that the ESAs funding arrangement should continue to be based mostly on public contributions, taking into consideration that the regulation of financial institutions, investment firms and other economic actors contributes to the promotion of public interest.
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