On Monday 24 September, the economic and monetary affairs committee of the European Parliament will adopt its negotiating position with the Council of the EU on two legislative proposals introducing a new prudential framework for investment companies, on the basis of amendments supported by the principal political groups.
“Broadly, all of the questions have been resolved through a compromise”, Sven Giegold (Greens/EFA, Germany), told EUROPE on Friday 21 September.
The legislative package, which was introduced in late 2017 (see EUROPE 11930), introduces prudential supervision, the intensity of which will depend on the category of the investment company, on the basis of its size, type and complexity (see EUROPE 12021).
Under the compromise amendments, of which EUROPE has had sight, the MEPs have changed the criteria to determine small, non-interconnected companies (category 2). On the list of cumulative criteria, they set the minimum level of assets safeguarded and administered at €50 million and client money held at €5 million.
The Greens will support the compromises on the table, because they consider that enough progress has been made on the transparency of investment policies and promoting more 'sustainable' finance. The European Banking Authority (EBA) will be invited to examine the idea of establishing differentiated prudential treatment if assets related to social and environmental activities are held.
'Country-by-country' reporting. Contrary to the initial hopes of the rapporteur, Markus Ferber (EPP, Germany), the MEPs will support the requirement for category 2 undertakings to publish data (turnover, number of employees, pre-tax profit/losses) broken down by member state and third countries in which they are active.
On remuneration, firms must set a ratio between directors' fixed and variable payment. However, due to the opposition of the EPP, ALDE and ECR, MEPs will not be able to demand a ceiling for bonuses paid out, moving away from the regime currently in force in the banking industry. The Greens/EFA group was in favour of such a limit, but its absence will not prevent it from supporting the report as amended.
Finally, the MEPs call upon the European Securities and Markets Authority (ESMA) to verify that the equivalence conditions between the prudential regime of a third country and EU legislation are still met. (Original version in French by Mathieu Bion)