EBF advisor: Pauline Guerin
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Publication date: 17 January 2020
On behalf of the European banking sector, the EBF has submitted its comments to the European Supervisory Authorities (ESAs) on the consultation paper setting out proposed amendments to the Commission Delegated Regulation (EU) 2017/653 (PRIIPs Delegated Regulation).
The EBF welcomes the ESAs’ consultation. However, Contradictory, overlapping and complex disclosure requirements may discourage retail clients from investing in financial instruments. Therefore, the EBF considers that it is important to work in the context of CMU 2.0 in order to improve retail investors’ trust into financial markets for the benefit of companies looking for funding and for the investors’ long-term benefit. In fact, as advocated for in the Markets4Europe[1] campaign (a private sector initiative identifying both the obstacles to a deeper CMU and the required reforms leading to better integrated markets) the EBF believes that requirements relating to clients’ information should be reviewed as to be made more consistent and less overwhelming for clients. We believe that a higher quality of information should be favoured.
General comments
The EBF would like to raise number of concerns:
– The EBF welcomes the ESAs consultation on PRIIPS but wonders how this articulates with any level 1 change. The Level 1 revision should take place before any level 2 change in order not to double the implementation work and costs.
– The EBF supports further alignment between PRIIPS and MIFID
– The EBF supports that the amendments proposed in this Consultation Paper should be implemented at one point in time. However, it is important to ensure that investment firms are given sufficient time to adapt to the new rules, as they will require substantive changes to IT systems.
– The EBF welcomes the ESA statement from 24 October 2019 regarding the PRIIPs scope for bonds but it would welcome further clarification as to the intended scope on Level 1.
– The EBF believes that a more comprehensive consumer testing of the proposals should have been conducted, in particular regarding the cost & charges information.
– Though the aim of comparability of the PRIIP KID documents is desirable – the comparability should only be a priority for de-facto comparable products. For instance, investors do not compare OTC derivatives with investment funds and comparability at the cost of precision and adequate information should therefore not be the result.
– The EBF would like to make a general comment on the articulation between PRIIPS and UCITS requirements: in the case a UCITS KID is required, the EBF does not the support the idea of duplicating the requirements with a PRIIPS KID.
– The EBF would also like to underline the fact that all new requirements such as PRIIPS demand a high level of data information. The need for data increases in parallel with regulatory requirements which then lead to an increase of data costs.
[1] For more information, please visit https://markets4europe.eu/
For more information:
Pauline Guerin, p.guerin@ebf.eu
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]]>EBF advisor: Roger Kaiser
Publication date: 08 February 2019
Executive summary
Recent alleged cases of money laundering have highlighted the need to improve the efficiency of the Anti-Money Laundering (AML) framework. This notably requires better cooperation and information exchange between supervisors, both cross-border and domestically. Strengthening the role of the European Supervisory Authorities (ESAs) in the field of AML has also become a priority of the EU Institutions. In this context, the ESAs have drafted Guidelines on the cooperation and information exchange for anti-money laundering and counter-terrorist financing supervision purposes (“The AML Colleges Guidelines”). In answer to the public consultation conducted on these draft Guidelines, the EBF, AFME and IIF provided comments.
Where possible, we encourage the ESAs Joint Committee to maximise the use of existing structures which should be run as efficiently as possible. Setting up supervisory colleges has potential to add another layer of complexity for firms and duplicating existing procedures should be avoided in order to ensure seamless cooperation and information exchange between competent authorities. We believe that taking a holistic view on the importance to enhancing cooperation between all sectors will help reduce criminal abuse of the financial system. We look forward to working with the Joint Committee as the Guidelines are developed and implemented across the EU and as it continues to work in a coordinated manner to address the broader issues regarding information sharing on a global basis.
EBF contact:
Roger Kaiser, Senior Policy Adviser Tax & Crime, r.kaiser@ebf.eu, +32 2 508 37 11
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Publication date: 26 February 2019
On Monday the EBF co-signed a letter with a group of European trade associations on the review of the European System of Financial Supervision, the so-called ESAs review, in light of the ongoing trilogue negotiations.
All the signatories of the letter expressed their support for the efforts to reinforce the harmony of the European Supervisory Framework, including closer cooperation with National Competent Authorities (NCAs) and more efficient governance of the ESAs.
Among other issues, the European Parliament proposal to use “no-action letters” is praised, the need to increase the transparency of the processes is also stressed, but also the importance of filling the gaps in the existing cooperation between NCAs and ESAs as well as some notes on the AML powers that will be granted to ESAs.
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]]>EBF advisor: Simon Pettinger
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Publication date: 29 March 2018
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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