Tag Archives: European Insurance and Occupational Pensions Authority

EU Legislative Package on Financial Regulation and Supervision Published

The whole legislative package on financial regulation and supervision of financial markets has been published in the Official Journal. The contents of the package:

1. Regulation (EU) No 1092/2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board

Regulation 1092/2010 establishes European System of Financial Supervision (ESFS), bringing together the actors of financial supervision at national level and at the level of the Union, to act as a network. The European Systemic Risk Board (ESRB) is established as a new independent body, covering all financial sectors as well as guarantee schemes. The ESRB is part of the European System of Financial Supervision (ESFS), the purpose of which is to ensure the supervision of the Union’s financial system. The ESFS comprises of

  • the ESRB;
  • the European Banking Authority;
  • the European Insurance and Occupational Pensions Authority;
  • the European Securities and Markets Authority;
  • the Joint Committee of the European Supervisory Authorities;
  • the competent or supervisory authorities in the Member States.

The ESRB is responsible for conducting macro-prudential oversight at the level of the Union and has no legal personality.

2. Regulation (EU) No 1093/2010 establishing a European Banking Authority

Regulation 1093/2010 establishes a European Banking Authority (EBA). The EBA has some quite broad competences, including preventing regulatory arbitrage, guaranteeing a level playing field, strengthening international supervisory coordination, promoting supervisory convergence and providing advice to the EU institutions in the areas of banking, payments, e-money regulation and supervision, and related corporate governance, auditing and financial reporting issues. EBA can also temporarily prohibit or restrict certain financial activities that threaten the orderly functioning and integrity of financial markets or the stability of the whole or part of the EU financial system.

3. Regulation (EU) No 1094/2010 establishing a European Insurance and Occupational Pensions Authority

Regulation 1094/2010 establishes a European Insurance and Occupational Pensions Authority (EIOPA). EIOPA has the same powers as EBA in the area of activities of insurance undertakings, reinsurance undertakings, financial conglomerates, institutions for occupational retirement provision and insurance intermediaries.

4. Regulation (EU) No 1095/2010 establishing a European Securities and Markets Authority

Regulation 1095/2010 establishes a European Securities and Markets Authority (ESMA). ESMA has the same powers as EBA in the area of securities, including matters of corporate governance, auditing, financial reporting, take-over bids, clearing and settlement and derivative issues.

5. Directive 2010/78/EU

Directive 2010/78/EU makes changes to existing legislation concern the definition of the scope of certain powers of the ESA, the integration of certain powers established in legal acts of the Union, and amendments to ensure a smooth and effective functioning of the ESA in the context of the ESF.

6. Regulation (EU) No 1096/2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board

Regulation 1096/2010 includes provisions for the involvement of the ECB in the functioning of the ESRB, including providing administrative and statistical support.

European Parliament Positions on Financial Regulation and Agriculture

The European Parliament has outlined its policy preferences on two very important subjects – financial regulation reform and the Common agricultural Policy (CAP).

On financial regulation the EP wants a strengthening of the powers of the three European supervisory authorities (ESAs) – the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority. The Parliament wants for the ESAs to be able to issue decisions directly to a financial institution such as a bank, where the national supervisor has not been able to change some of its practices that are considered unsound. The ESAs would also have the power to settle disputes between national supervisors.

On the Common Agricultural Policy the European Parliament says that funding should be maintained “at least maintained during the next financial period” (2013-2020). MEPs call for more objective criteria, partly to reduce disparities in direct payments, considering the current “hectare basis” inappropriate, and partly to reflect regional diversity. The Parliament believes that geographical indications of origin need to be strengthened and enforced. The EP proposes strengthening producers’ bargaining power in the food supply chain vis-à-vis the retailers and other players and improving price transparency. This position aligns the Parliament with the position of Member States that oppose a radical reform of the CAP. The Commission and other Member States, however, believe that the funding for the CAP should be reduced, and used elsewhere for boosting the overall competitiveness of the EU.

Three New European Financial Supervision Bodies Established

The Council has decided to establish three new authorities for supervision at the micro level: the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority.

The three bodies will work in cooperation with national supervision bodies and their decisions will be legally binding.