Regulations: 4 areas the European Commission wishes to streamline ASAP (Part 2)

December 5, 2017

  

The European Commission released on the 1st of December 2017 a report aiming at rationalising financial regulations within the EU. After consulting with 300 stakeholders, the Comission decided that 4 areas in particular deserved a bit more of attention.

 

Read part 1 here

 

Post 2007-crisis regulations in the EU are often criticised for putting too much pressure on legal entities in the energy trading sector.

 

In addition, some regulatory iniciatives like EMIR and MiFID are overlapping in certain areas, making it confusing for businesses to comply with.

 

With this in mind, the European Commission launched a Call for Evidence on the regulatory framework for financial services, with the objective to verify whether EU legislation adopted since the financial crisis were working as intended.

 

 

According to this study, targeted follow-up measures are justified in four areas:

 

1. Reducing unnecessary regulatory constraints on financing the economy;

2. Making rules more proportionate while preserving prudential objectives;

3. Reducing undue regulatory burdens;

4. Making the regulatory framework more consistent and forward-looking.

 

 

3. Reducing undue regulatory burdens

 

Reducing financial regulatory burden as much as possible is important for the Union to remain economically competitive.

 

In this area, the European Commission intents to streamline areas like supervisory reporting, public disclosure requirements, barriers to entry and market integration, as well as compliance costs in general.

 

Regarding this topic, the Commission will issue a few follow-up measures, including:

 

Ongoing follow-up measures include:

 

  • The Commission has completed the mapping exercise of national transposition measures for 11 Directives to remove some of the divergences in transposition of EU directives in national legislation. For 10 other Directives, the mapping exercise is still ongoing and should be completed in 2018;

  • The Commission is currently assessing the national transposition measures for the Transparency Directive and the Accounting Directive. This includes assessing the concern that there are divergent rules as regards the notification of major holdings of voting rights;

  • The Commission will monitor the application and impact of the outsourcing provisions in the Benchmark Regulation once it has entered into full application on 1 January 2018;

  • Read all ongoing follow-up measures here.

 

 

4. Making the regulatory framework more consistent and forward-looking

 

According to the European Commission’s report, the Call for Evidence also underlined the importance of:

 

 

Ongoing follow-up measures regarding this topic include:

  • As part of the CMU Action Plan, the Commission has launched a study to assess the way investment products are distributed to retail investors across the EU. Final findings from the study are expected at the beginning of 2018;

  • Following the public consultation on FinTech18, the Commission is currently assessing what needs to be done at EU level to contribute to the deepening and broadening of the EU capital markets from a FinTech perspective;

  • The Commission will present an Action Plan on sustainable finance with regulatory measures in early 2018;

  • Read all ongoing follow-up measures here.

 

 

With more than 40 pieces of EU legislation adopted since the financial crisis, the financial regulatory landscape is quite busy.

 

The 8th ETRC 2018 Summit (6-8 March 2018 | London) provides the best platform for legal and compliance officers to communicate directly with regulators and get a clear update on how to comply efficiently to financial regulations.

 

Read part 1 here

 

Sources:

 

 

Related sessions from ETRC 2018:

  • Update from financial regulators

    • MiFID II’s first feedback

    • Anti-abuse activity under MAR: Enforcement

    • Brexit: Potential consequences

    • EMIR review:

      • What is the timeframe?

      • What are the main potential changes?

    • What is new under CRD and SFTR?
       

  • Q&A with the Financial Regulators: Exclusive Q&A session between the Financial Regulators and audience to address issues and ask questions on around:

    • MiFID II: Position limit and position reporting challenges

    • Hedging policy: Definition and conditions

    • Enforcement of the regulations: Anti-abuse measures and investigation

    • Review of EMIR: Timeframe
       

  • The Market Abuse Directive best practices: Implementing trade surveillance

    • Overview of the different options:

      • Set of procedures, no system

      • Built-in system

      • Off-shelf system

    • Benchmarking the different approaches:

      • Investment

      • Efficiency

      • Are they future-proof?

         

         

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