MEPs of the European Parliament’s Economic and Monetary Affairs Committee will vote on Thursday 10 January on the three draft reports on the reform of the three European financial supervisory authorities (ESAs): ESMA, EBA and EIOPA, which supervise the financial markets and the banking and insurance sectors respectively (see EUROPE 11864).
Compromises between political groups were only finalised between Tuesday and Wednesday. The work is indeed enormous. The three draft reports on this governance, competences and financing reform for the ESAs cover nearly 12 legislative texts, a block of 300 pages.
As for the Greens/EFA Group, which has seen several of its proposals taken up, satisfaction is in order.
“The European Parliament is crucially strengthening European financial supervision. The compromise will increase the ESAs ability to act through a new Executive Board and improve supervisory convergence across the single market. The new role of ESAs in monitoring environmental, social and governance risks will ensure that such risks are better incorporated by market participants”, Sven Giegold (Greens/EFA, Germany) told EUROPE on Wednesday 9 January.
Consumer protection. The compromise texts, consulted by EUROPE, significantly strengthen the powers of the ESAs with regard to consumer protection (see EUROPE 12061). This was one of Pervenche Berès' (S&D, France), co-rapporteur on the dossier, main concerns.
In particular, ESAs are granted the power to prohibit or temporarily restrict the marketing, distribution or sale of certain financial products that may cause significant harm to customers or threaten the proper functioning of the Union's financial system. The ban could be renewed twice, after which it would become permanent, unless the Authority decides otherwise.
They may also, according to the text, conduct surveys on certain types of financial institutions or products on issues related to consumer protection.
It should be noted that the principle of no-action letters- supported by the Greens/EFA - has also been retained, provided that they are limited in time and strictly regulated. They would allow ESAs to indicate to market players that legislation would not be applied temporarily if it infringed, for example, on market confidence or consumer protection.
On the other hand, the European Parliament decided to remove the possibility for ESAs to impose fines on financial institutions themselves if they do not provide the requested information.
ESMA's direct competences. The new direct supervisory powers entrusted to ESMA were a controversial issue for both the European Parliament and the Council. The text also makes some changes here.
With regard to prospectuses, ESMA remains responsible for the supervision and authorisation of: - prospectuses drawn up by an entity in the EU and relating to the admission to trading on a regulated market of non-equity securities with a denomination per unit of EUR 100 000 or more in more than one Member State; - prospectuses drawn up by an entity in the EU relating to asset-backed securities in more than one Member State; - prospectuses drawn up by third-country issuers.
Financing. The Commission's proposal to involve industry in the budget of the European authorities did not find majority support in the European Parliament and MEPs preferred to maintain current functioning.
The budget would, according to the text, be financed by a contribution from the general budget of the Union of at least 35% and a contribution from the competent national authorities of up to 65%.
Anti-money laundering measures. Unlike the EU Council (see EUROPE 12164), the European Parliament has directly incorporated the Commission's proposal to confer new powers to the EBA in the fight against money laundering (see EUROPE 12094).
However, during the interinstitutional negotiations, the European Parliament would not rule out separating the files, according to a European source, since the Council has not yet adopted its position on the overall reform. (Original version in French by Marion Fontana and Mathieu Bion)