On 14 June 2016, the International Regulatory Strategy Group (IRSG) published a report entitled “The cumulative impact of EU financial services regulation: better regulation for jobs and growth report.” This report provided further detail on the IRSG’s proposals for improved regulation and regulatory forbearance.
The eight recommendations set out in the report are targeted at the European Commission (the Commission), European Parliament, the Council of the EU and European Supervisory Authorities (ESAs).
In summary, the IRSG believes that it is important to assess the impact to date of EU financial services regulation. Whilst the report recognises that financial services are key to delivering economic growth and jobs, it does not advocate widespread deregulation. Instead, the report sets out two key principles for better regulation, namely:
- The adoption of a Regulatory Code, by which the Commission is to ensure that it will develop its legislative proposals in a way that ensures prosperity, productivity and growth, that it will only develop legislative proposals if they are necessary and there is no alternative to legislation, that it will engage early with relevant stakeholders and that all future legislative proposals will be based on published risk assessments.
- The adoption of Framework Principles on extraterritorial effect, proportionality/diversity and the legislative timetable. The IRSG believe this would ensure that, going forward, the Commission are explicit as to the global application of each specific legislative proposal, that it is recognised that a one size fits all approach is often inappropriate and that ESAs would have adequate time to conduct thorough public consultations and carry out detailed cost benefit analysis on proposals.
The IRSG states that the purpose of the report is to contribute to better law making and that the IRSG is ready to work with the Commission and other stakeholders to develop these proposals further.