Brexit – ESMA sets out general principles to support supervisory convergence in EU27 in context of UK withdrawing from EU

On 31 May, ESMA published an opinion (ESMA42-110-433) on general principles to support supervisory convergence in the context of the UK withdrawing from the EU. The opinion is addressed to the 27 NCAs that will remain in the EU once the UK has left (referred to as the EU27), as well as the NCAs of Norway, Lichtenstein and Iceland, as per the EEA agreement. It is intended to be a practical tool to support supervisory convergence in the context of increased requests from UK financial market participants seeking to relocate to the EU27. ESMA assumes that the UK will become a third country after it has withdrawn from the EU. The opinion covers all legislation referred to in the ESMA Regulation, in particular, the AIFMD, the UCITS and the MiFID I and II. In the opinion, ESMA sets out the following nine general principles aimed at fostering consistency in authorisation, supervision and enforcement relating to the relocation of entities, activities and functions from the UK: (i) no automatic recognition of existing authorisations; (ii) authorisations granted by the EU27 should be rigorous and efficient; (iii) NCAs should be able to verify the objective reasons for relocation; (iv) special attention should be granted to avoid "letterbox" entities in the EU27; (v) outsourcing and delegation to third countries is only possible under strict conditions; (vi) NCAs should ensure that substance requirements are met; (vii) NCAs should ensure sound governance of EU entities; (viii) NCAs must be in a position to effectively supervise and enforce EU law; and (ix) co-ordination to ensure effective monitoring by ESMA.

Brexit – EIOPA Chair comments on impact of Brexit on EU insurance industry

On 30 May, EIOPA published an interview given by Gabriel Bernardino, EIOPA Chair, to Insurance Asset Management Europe. In the interview Mr Bernardino was asked how he sees Brexit affecting the insurance industry. In response, he advised that: EIOPA is closely monitoring developments linked with the Brexit negotiations; as regards the possible impact on the conduct of insurance supervision and insurance products, it is too early for EIOPA to form any firm position; as soon as the UK leaves the EU, insurers based in the UK will no longer benefit from the EU passport. UK insurers seeking to relocate subsidiaries to the 27 remaining EU member states (the EU27) need to be subject to proper supervision. To collect evidence, EIOPA's oversight team is visiting NCAs engaged in discussions with UK firms. Empty shell or "letter boxes" in the EU27 are not acceptable. Sound supervision demands the appropriate location of management and key functions, including sound outsourcing and reinsurance policies; EIOPA is closely monitoring any possible effects on financial stability and consumers; and in due course, EIOPA intends to publish guidance for the EU27 NCAs on sound principles for authorisation and supervision in the context of the UK withdrawing from the EU. It will subsequently closely monitor implementation of the guidance.

Brexit – EC publishes first two draft position papers on Article 50 negotiations

On 29 May, the EC published two draft position papers laying down the main principles of the EU's position to be presented to the UK when Article 50 Brexit negotiations start. They are: a working paper on essential principles on citizens' rights; and a working paper on essential principles on financial settlement. The Article 50 Brexit negotiations with the UK are planned to start in the week of 19 June.

Working paper on Citizens Rights


Please see our eAlert: Capital Markets Union and securitisation regulatory reform: Win some (more), lose some

CCP – ESMA consults on guidelines on CCP conflicts of interest management under EMIR

On 1 June, ESMA published a consultation paper (ESMA70-151-291) on guidelines relating to the management by CCPs of conflicts of interest. ESMA explains that EMIR only contains generic provisions relating to CCPs' conflict of interest management. It requires CCPs to act in the best interests of their clearing members and the clients. Therefore, CCPs need to have in place robust organisational arrangements and policies to prevent potential conflicts of interest and to solve them if they occur. ESMA believes that further guidance would be beneficial and further facilitate supervisory convergence on this area. The purpose of the guidelines is to set out the criteria CCPs should apply to avoid or mitigate the risks of conflicts of interest and to ensure a consistent implementation across CCPs. Areas addressed by the guidelines include: (i) written arrangements to identify and manage any potential conflicts of interest between CCPs, clearing members and clients; (ii) where written arrangements are not sufficient, disclosure of conflicts of interest to the clearing member or clients before entering into any new transactions; and (iii) possible conflicts with a CCP’s parent undertaking or subsidiary. The consultation closes on 24 August. ESMA will consider the feedback it receives to the consultation and expects to publish a final report on the guidelines by the end of 2017.

CSDR - ESMA guidelines on relevant currencies and substantial importance of a CSD for a host member state

On 1 June, ESMA published the following sets of guidelines under the CSDR: (i) guidelines on the process for the calculation of indicators to determine the most relevant currencies in which settlement takes place (ESMA70-708036281-66); and (ii) guidelines on the process for calculation of the indicators to determine the substantial importance of a CSD for a host member state (ESMA70-708036281-67).

CMU – Council of EU agreement reached on securitisation

On 30 May, the Council of the EU reached agreement with the EP on proposals aimed at facilitating the development of a securitisation market in Europe. The proposals are part of the EC’s work to establish a CMU in the EU. The agreement covers two draft regulations: the proposed regulation laying down common rules on securitisation and creating a European framework for simple, transparent and standardised securitisation (Securitisation Regulation); and the proposed regulation amending the CRR (CRR Amendment Regulation). The CRR Amendment Regulation is to make consequential amendments to the CRR required by the proposed Securitisation Regulation. Further technical input is required to finalise the text which will then be submitted to the Council of the EU and the EP for adoption.

Shadow banking – ESRB publishes second EU shadow banking monitor

On 30 May, the ESRB published its second EU shadow banking monitor. The monitor presents an annual overview of developments in the European shadow banking system to assess potential risks to financial stability. It highlights a number of risks and vulnerabilities in the shadow banking system that need to be monitored, including: liquidity risk and risks associated with leverage among some types of investment funds (for example, investment funds that invest in less liquid markets but offer daily redeemable shares or that are highly leveraged); interconnectedness and contagion risk across sectors and within the shadow banking system, including domestic and cross-border linkages; procyclicality, leverage and liquidity risk arising from use of derivatives and securities financing transactions; vulnerabilities in some parts of the other financial institutions sector, where significant data gaps prevent a definitive risk assessment. The ESRB also reports that growth in EU shadow banking assets slowed significantly in 2016.


Please see our eAlert: Pensions: what's new this week

Retail financial services - ECON draft report on retail financial services action plan

On 1 June, the ECON published a draft report (PE605.928v01-00) (dated 30 May) on the EC’s action plan on retail financial services. The draft report contains a motion for a Parliament resolution on the action plan and an explanatory statement by the rapporteur, Olle Ludvigsson. ECON will consider and vote on the draft report, and the final agreed version will be considered by the Parliament in a plenary session.

Consumer protection – EC completes Fitness Check of key consumer protection and marketing directives

On 29 May, the EC published the results of its Fitness Check of six key consumer protection and marketing directives: (i) the Misleading and Comparative Advertising Directive; (ii) the Unfair Commercial Practices Directive; (iii) the Price Indication Directive; (iv) the Unfair Contract Terms Directive; (v) the Sales and Guarantees Directive; and (vi) the Injunctions Directive. As a result of the Fitness Check, the Commission will focus on improving the overall effectiveness, efficiency and coherence of the Directives. To examine the opportunity for possible changes in legislation, the Commission will: publish an "Inception Impact Assessment" outlining the scope and options for future legislative action; hold an online public consultation; prepare an impact assessment; and present a legislative proposal based on its findings.

Pensions – FCA policy statement on implementing information prompts in the annuity market

On 26 May, the FCA published a policy statement on implementing information prompts in the annuity market (PS17/12). PS17/12 sets out the FCA's response to the feedback received to its November 2016 consultation on information prompts (CP16/37). PS17/12 is of relevance to anyone with an interest in pensions and retirement issues, including providers of retirement income products, individuals and firms providing information or advice on retirement, and distributors of retirement income products. The FCA has made the following changes to its final rules compared to those consulted on: requiring the inclusion of a clear and prominent warning about enhanced annuities; requiring that firms engaging with consumers over the telephone will only have to provide the information prompt in relation to the specific guaranteed quote that a consumer has indicated they would like to proceed with; requiring firms to implement the changes by 1 March 2018 (previously it was 1 September); and a new section (COBS 19.9) in the Conduct of Business sourcebook will focus on pension annuity comparison information, including the use of a prescribed template.


FCA Handbook Notice 44

On 26 May, the FCA published Handbook Notice 44, which sets out the changes made to the FCA Handbook under the following instruments, which were made by the FCA Board on 25 May 2017: (i) Handbook Administration (No 46) Instrument 2017 (FCA 2017/29). This instrument makes minor administrative changes to the following modules of the FCA's Handbook: FEES manual; IPRU(INV); MCOB; SUP; DISP; COLL; CONC; FUND. The changes come into force on 26 May except for the changes to DISP, which come into force on 29 August. The changes correct or clarify existing provisions; (ii) Conduct of Business Sourcebook (Pension Annuity Comparator) Instrument 2017 (FCA 2017/30). This instrument makes changes to the Glossary and COBS 14 and 19 to require firms to tell consumers how much they could gain from shopping around and switching provider before a potential annuity purchase. The instrument comes into force on 1 March 2018; and (iii) Enforcement (Bank Recovery and Resolution Order 2016) Instrument 2017 (FCA 2017/31). This instrument makes changes to the DEPP and the EG to provide a decision making mechanism for the use of new powers under the Bank Recovery and Resolution Order 2016 (SI 2016/1239). The instrument came into force on 26 May.


Please see our eAlert: Creating a risk of bribery can violate the FCPA: low threshold for SEC enforcement actions

MAR - ESMA final report on draft ITS on co-operation between competent authorities under MAR

On 1 June, ESMA published its final report (ESMA70-145-100) on draft ITS on forms and procedures for co-operation between NCAs under the MAR. The report sets out procedures and forms for NCAs to exchange information to help each other where necessary under Article 25 of MAR. ESMA is required to draft ITS on the issue of regulatory co-operation by Articles 24 and 25 of MAR. ESMA explains that its report only addresses draft ITS on co-operation between NCAs. The relevant provisions of MAR also require ESMA to draft ITS on co-operation between other supervisory entities, such as ACER, NRAs defined under REMIT and ESMA itself. It states that this other set of technical standards is under finalisation. The text of the draft ITS is set out in Annex II to the report. ESMA has submitted the final draft ITS to the European Commission for endorsement. The Commission has three months to decide whether to endorse the draft ITS.

MLD4 – Joint Committee of ESAs consultation paper on draft RTS under Article 45(6)

On 31 May, the Joint Committee of the ESAs published a consultation paper (JC 2017/25) on draft RTS under Article 45(6) of the MLD4. The Joint Committee explains that, under Article 8 of MLD4, credit and financial institutions have to put in place and maintain AML and CTF policies and procedures to assess and manage effectively the money laundering and terrorist financing risks to which they are exposed. Where they are part of a group, the policies and procedures have to be applied at group-level. The Joint Committee notes that this can be challenging where branches or majority-owned subsidiaries are located in a third country, outside the EEA, with less stringent AML and CTF requirements. With these RTS, the ESAs aim to foster a consistent and more harmonised approach to identifying and managing the money laundering and terrorist financing (ML/TF) risk to which credit and financial institutions are exposed as a result of their operations in a third country, should the implementation of the third country’s law not permit the application of group-wide policies and procedures. These RTS set out minimum actions that should be taken by credit and financial institutions in such circumstances and will contribute to creating a level playing field across the Union’s financial sector. The deadline for comments is 11 July. There will be a public hearing on 23 June. The Joint Committee will review the draft RTS in the light of responses received, and will then submit final draft RTS to the EC for endorsement.

Council of EU Presidency consolidated compromise text on proposed Directive on countering money laundering by criminal law

On 30 May, the Council of the EU published a note (9718/17), from the Presidency to the Council, relating to the proposed Directive on countering money laundering by criminal law. In the note, the Presidency explains that, since January, the Council working party on substantive criminal law (DROIPEN) has been working on the proposed Directive with a view to preparing a compromise text as a basis for reaching a general approach at the Council in June. The consolidated compromise text of the proposed Directive, resulting from these discussions and confirmed at the Permanent Representative Committee (COREPER) on 24 May, is set out in an Annex to the note. (Changes to the EC’s original legislative proposal are marked in bold in the text.). The Presidency advises that the text seeks to reflect the balance of positions expressed by delegations in a global compromise framework. The Presidency invites the Council to reach a general agreement on the text as sent out in the Annex, which would constitute the basis for future negotiations with the European Parliament in the context of the ordinary legislative procedure.


On 30 May, ESMA published an updated version of its Q&A on the MAR. The new Q&As include: (i) a new Q&A on the disclosure of inside information related to Pillar II requirements, namely whether credit institutions are required under MAR to publish systematically the results of the Pillar II assessment; and (ii) a new question on whether a policy under which, after coming into possession of inside information, the person should immediately and without the exercise of discretion cancel all orders relating to that information (a blanket order cancellation policy) is compliant with the prohibition on insider dealing under MAR.

MAR – ESMA announces launch of reference data submission

On 30 May 2017, ESMA published a communication (ESMA70-145-103) announcing launch of reference data submission under Article 4(1) of the MAR. ESMA reports that its IT system for the collection of financial instrument reference data under Article 4(1) of MAR (that is, the Financial Instrument Reference Data System or FIRDS) will become operational from 17 July. From that date, market operators of regulated markets (RMs) and investment firms and market operators operating MTFs will be able to transmit via FIRDS reference data concerning financial instruments for which a request for admission to trading was made, which were admitted to trading or were traded from 3 July 2016 onwards. ESMA advises financial market participants to contact their competent authorities for further details about compliance with Article 4(1) of MAR in respect of the financial instruments concerned as well as any questions about the delegation arrangements between competent authorities and ESMA in relation to FIRDS.


FINTECH – FATF FinTech and RegTech forum 2017

On 30 May, the FATF published a summary of its FinTech and RegTech forum, which was held on 25 and 26 May. The forum was attended by representatives from the FinTech and RegTech sectors, financial institutions and FATF members and observers. The forum discussed developments in FinTech and RegTech, including peer-to-peer transfers, crowdfunding, distributed ledger-technology or blockchain-based services, analytical tools, KYC utilities and digital identity. The discussions covered issues such as different national approaches to the regulation of FinTech institutions and activities, and how FinTech and RegTech innovations could enhance capabilities to monitor risks in the financial system and to investigate ML and TF. Participants agreed on the following guiding principles (the San Jose principles) to assist the public and private sectors in promoting further constructive dialogue and engagement on these issues and help strike the right balance between supporting innovation and managing any ML and TF risks that arise: (i) fight terrorism financing and money laundering as a common goal; (ii) encourage public and private sector engagement; (iii) pursue positive and responsible innovation; (iv) set clear regulatory expectations and smart regulation that address risks as well as allow for innovation; (v) and fair and consistent regulation.


Fund management – WMA confirms merger with APFA

On 31 May, the Wealth Management Association (WMA) published a press release announcing that it and the Association of Professional Financial Advisers (APFA) have agreed to merge to form the Personal Investment Management & Financial Advice Association (PIMFA). The merger will be effective from 1 June. The new association will be led by Liz Field, currently CEO of the WMA.

EuVECA Regulation and EuSEF Regulation – EC announces political agreement on proposed amending Regulation

On 30 May, the EC published a press release announcing that it has reached agreement with the Council of the EU and the EP on the proposed Regulation amending the EuVECA Regulation and the EuSEF Regulation. The press release states that the agreement reached: extends the range of managers eligible to market and manage EuVECA and EuSEF funds to larger fund managers (that is, those with assets under management of more than EUR500 million); expands the ability of EuVECA funds to invest in SMEs listed on SME growth markets; decreases costs by explicitly prohibiting fees imposed by competent authorities of host member states where no supervisory activity is performed; and simplifies the registration process and determines the minimum capital necessary to become a manager. A Council press release explains that the agreement will now be submitted to EU ambassadors "in the coming days" for endorsement on the Council's behalf. Then, the Council and the Parliament will be called on to adopt the proposed Regulation without further discussion, and the proposed Regulation will start to apply three months after its entry into force.


Please see the Brexit section for an update on the impact of Brexit on the EU insurance industry.

Insurance - IAIS consult on revised draft ICP on reinsurance and other forms of risk transfer

On 1 June, the International Association of Insurance Supervisors (IAIS) launched a consultation on a revised version of the ICP 13, on reinsurance and other forms of risk transfer. The IAIS explains that the consultation relates to revisions to the current (2011) version of ICP 13. Its review of ICP 13 follows on from a peer review assessment of this ICP, which it carried out in 2016. The task force responsible has taken up proposals for improving ICP 13 from the assessment team, and allowed for these in the revised draft, where possible. The task force has also taken into consideration developments occurring in the market, as well as supervisory practices, since the last revision. The IAIS advises that the revised draft also allows for the thematic approach it adopted in September 2015, which is aimed at ensuring a more efficient process of developing supervisory materials. Under this approach, the management and development of supervisory materials is carried out by theme across the three tiers of standard setting: ICPs, ComFrame and policy measures for global G-SIIs, each building on the previous one. The IAIS plans to hold a public background call via teleconference, to discuss the consultation and receive initial public feedback, on 5 June. Comments can be made on the revised draft of ICP 13 until 31 July. The IAIS will use feedback to further develop the revised ICP 13 before finalising it.

UK insurance industry – ABI Director speech on change in UK general insurance industry

On 31 May, the ABI published a speech, given by James Dalton, ABI Director, General Insurance Policy, on change in the UK general insurance industry. Comments of interest include: the most transformational project that the ABI has led, which involved extensive engagement on underpinning the regulatory framework, has been the establishment of Flood Re; it is important for insurers to continue to address their poor reputation with consumers, the media and politicians; the biggest macro-challenge and opportunity of the future is how insurers respond to the digital revolution; insurers' ability to deliver against changing customer demands and expectations is fundamentally dependent on an ability to gather, process, understand and use data; there has been a fundamental shift in the relationship between traditional insurers and a number of new and emerging technology companies. Insurers recognise the benefits of collaborating with and investing in these companies, given that they offer ways of working that are more efficient both for insurers and their customers; and Brexit is undoubtedly the all-encompassing issue of the day. Insurers continue to have some high-level priorities in common with the rest of the business community, such as the status of staff from the EU and continued access to the best global talent.


IOSCO updates objectives and principles of securities regulation and related assessment methodology

On 1 June, the IOSCO published a revised version of its objectives and principles of securities regulation (dated May 2017). The document sets out 38 principles of securities regulation that constitute an agreed set of high-level standards intended to outline the basis of an effective securities regulatory system. They are based on three objectives of securities regulation, namely: (i) protecting investors; (ii) ensuring that markets are fair, efficient and transparent; and (iii) reducing systemic risk. IOSCO has also published a revised version of its methodology for assessing implementation of these objectives and principles (dated May 2017).

Revised version of its methodology for assessing implementation of these objectives and principles

MiFID II – ESMA opinion on determining third-country trading venues for purpose of position limit regime

On 31 May, ESMA published an opinion (ESMA70-156-112) on whether commodity derivatives traded on a third-country venue should be considered as traded OTC for the purposes of the position limits regime under the MiFID II. ESMA believes that: positions limits should only apply to contracts in commodity derivatives traded on EU trading venues and to OTC contracts economically equivalent to such contracts; and contracts in commodity derivatives traded on a third-country facility that is considered as a trading venue should not be regarded as OTC and, therefore, the positions resulting from trading those contracts should not count towards the EU position limit regime. ESMA will publish a list of third-country trading venues that meet its criteria in an annex to its opinion. It will update the list on an ongoing basis.

MiFID II – ESMA opinion on determining third-country trading venues for the purpose of MiFID II post-trade transparency requirements

On 31 May, ESMA published an opinion (ESMA70-154-165) on whether the requirement in Articles 20 and 21 of the MiFIR for firms to make information on transactions traded on a trading venue public through an APA applies also to transactions carried out on a third-country trading venue. ESMA's opinion is that information on transactions concluded by EU investment firms that are truly OTC (that is, bilateral transactions with non-EU firms), or transactions concluded on third country trading venues that would not be subject to a certain level of post-trade transparency should be made public in the EU through an APA under Articles 20 and 21 of MiFIR. However, ESMA also believes that EU firms should not interpret the post-trade transparency requirements out in Articles 20 and 21 of MiFIR as requiring them to systematically republish information in the EU about transactions concluded on third-country trading venues, where those venues are subject to transparency provisions similar to those applicable to EU trading venues. ESMA is aware that the correct application of the post-trade transparency requirements will require the identification of third-country trading venues that comply with similar post-trade transparency requirements as EU trading venues. It believes that these third-country trading venues should have features similar to those common to all EU trading venues and specifies a number of objective criteria that a third-country trading facility would need to meet to be considered as similar for the purposes of the MiFIR post-trade transparency regime. Therefore, for the purposes of Articles 20 and 21 of MiFIR, EU investment firms should not be required to publish through APAs information about transactions that are concluded on third-country trading venues that meet the specified criteria. ESMA will publish a list of third-country trading venues that meet its criteria in an annex to its opinion. It will update the list on an ongoing basis.

MiFID II – ESMA updates Q&As on market structures, commodity derivatives and transparency

On 31 May, ESMA published a press release announcing that it has published new Q&As providing guidance on implementation of the MiFID II and MiFIR. The new Q&As are included in updated versions of the following MiFID II Q&As (all dated 31 May): (i) Q&A on MiFID II Directive and MiFIR market structures topics; (ii) Q&A on MiFID II Directive and MiFIR commodity derivatives topics; and (iii) Q&As on MiFID II Directive and MiFIR transparency topics.


PSD2 – EC letter on amendments to EBA draft RTS on strong customer authentication and common and secure open standards of communication

On 31 May, the EBA published a letter (dated 24 May) sent to it by the EC, in which the EC states that it intends to amend the draft RTS on strong customer authentication and common and secure open standards of communication under Article 98 (4) of the PSD2. The substantive changes envisaged by the EC relate to: independent auditing of the security measures in cases when the transaction risk analysis exemption is applied (Article 3(2) of EBA draft); new exemption to strong customer authentication for certain corporate payment processes (new Article 17); fraud reporting by payment service providers (PSPs) directly to EBA (Articles 16(2) and 17(2) of EBA drafts; and contingency measures in case of unavailability or inadequate performance of the dedicated communication interface (Article 28 of EBA draft). The text of the draft RTS, with the Commission's proposed amendments, was attached to the letter. However, at this stage, the EBA has not published this. The letter states that the amended text also contains improvements to the legal drafting and editorial changes, as well as some additional clarifications on the text in the recitals and explanatory memorandum.


CRR – Council of EU Presidency compromise proposal on proposed Regulation amending CRR as regards transitional period for mitigating impact on own funds of introduction of IFRS 9

On 1 June, the Council of the EU published the final Presidency compromise proposal (9480/17) on the proposed Regulation amending the CRR as regards the transitional period for mitigating the impact on own funds of the introduction of IFRS 9 and the large exposures treatment of certain public sector exposures denominated in non-domestic currencies of member states.

CRR – EC adopts Delegated Regulation on RTS further specifying additional objective criteria relating to liquidity coverage for credit institutions

On 31 May, the EC adopted a Delegated Regulation (C(2017) 3522) supplementing the CRR with regard to RTS further specifying the additional objective criteria for the application of a preferential liquidity outflow or inflow rate for cross-border undrawn credit or liquidity facilities within a group or an institutional protection scheme. The next step is for the Council of the EU and the EP to consider the Delegated Regulation. If neither of them objects, it will enter into force twenty days after it is published in the OJ.


BRRD - Council of EU Presidency compromise proposal on proposed Directive amending BRRD relating to ranking of unsecured debt instruments in insolvency hierarchy

On 1 June, the Council of the EU published the final Presidency compromise proposal (9479/17) on the proposed Directive amending the BRRD as regards the ranking of unsecured debt instruments in insolvency hierarchy. The proposed Directive is part of the reforms (often referred to as BRRD II) that were proposed by the EC in November 2016. The reforms relate to the EU implementation of the FSB’s TLAC standard and other amendments to the text of the BRRD.


EBA response to EC consultation on operations of ESAs

On 31 May, the EBA published its opinion (EBA/Op/2017/08) on the EC’s consultation on the operations of the ESAs. The EBA's opinion includes a call for a stronger advisory role to the EC and the co-legislators. It suggests that this could be achieved through: informal engagement with the EC before publication of legislative proposals; legal requirement that the EBA is consulted in matters falling within the EBA's interest as defined by its founding regulation; requirement to bring to the EC’s attention areas where differences in national rules and practices hamper the functioning of the single market and require legislative intervention; and on-going access to information on development of draft texts in the Council of the EU and trialogue discussions, together with prior discussion of the content and timelines of EBA mandates.

ESMA response to EC consultation on operation of ESAs

On 30 May, ESMA published its response (dated 29 May) (ESMA03-173-194) to the EC’s consultation on the operations of the ESAs. As a general point, ESMA states that the current supervisory model combining centralised tasks within ESMA with most of the supervision carried out at national level should be continued, but with a clear view to addressing the risks and opportunities that arise with a more important role for cross-border financial markets in the context of CMU and Brexit. The response discusses a number of issues, including: third countries; direct supervision; supervisory convergence; access to data and reporting; and power to suspend rules.

EIOPA response to EC consultation on operation of ESAs

On 29 May, EIOPA published its response to the EC’s consultation on the operations of the ESAs. In the response, EIOPA states that a holistic approach to prudential and conduct supervision, further refinements in relation to supervisory convergence, and equivalence assessments should be a high priority in the ESA’s review.