The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published a report on the relationship between the EU and third countries concerning financial services regulation and supervision. This is particularly pertinent as the UK will become a third country when it leaves the EU. ECON believes that a consistent framework for ongoing supervision of an equivalent third-country regime should be developed and the report includes a motion for a European Parliament resolution calling for greater transparency by the Commission in relation to third country equivalence decisions. The motion includes calls for the Commission to:
- consider the current equivalence regime and to assess whether it contributes to achieving a level playing field between EU and third-country financial institutions, while preserving the financial stability of the EU or of one or more of its Member States, market integrity, investor and consumer protection and the functioning of the internal market. This review, together with proposals for improvement where applicable, should be made public;
- review and provide a clear framework for a transparent, coherent and consistent application of equivalence procedures which introduces an improved process for the determination, review, suspension or withdrawal of equivalence;
- allow equivalence decisions to be subject to ongoing monitoring by the relevant European Supervisory Authority (ESA) and for the outcome of such monitoring to be made public;
- allow ESAs to make ad hoc assessments of developments in third countries based on reasoned requests from Parliament, the Council and the Commission;
- annually report to the European Parliament all decisions on equivalence, including equivalence granted, suspended and withdrawn, and to explain the rationale for those decisions; and
- introduce transparent procedures governing the adoption, withdrawal or suspension of equivalence decisions. ECON believes that the European Parliament should be consulted in an appropriate manner, in principle before such a withdrawal decision is taken.
The European Parliament is likely to consider the report in its plenary session which is currently taking place, from 10 September to 13 September 2018.