Review of the European Supervisory Authorities

On 10 January, the European Parliament's Committee on Economic and Monetary Affairs (ECON) adopted its position on the reform of the European Supervisory Authorities (ESAs) initiated by the European Commission in September 2017. However, with differences persisting among member states of the EU Council, the chances of reaching a trilogue agreement under the Romanian Presidency look slim. That being said, given the Presidency's stated goals, it could be that a tripartite agreement will be reached by end-June on the AML portion of the review.

AMAFI has been highlighting a number of questions in this area for many months. One key issue is the need to strike the right balance between convergence and proportionality, by promoting supervisory convergence for all areas where a pan-European market actually exists, while emphasising proportionality in other areas, so that national authorities can organise their markets locally to best meet the needs of investors and issuers (AMAFI / 18-43). Although a Capital Markets Union is obviously important, it cannot be held up as an article of faith while at the same time ignoring the true situation on markets that help finance a whole swathe of the economy through close-knit relationships. In AMAFI's view, one area to improve in terms of supervisory convergence would be to put ESMA's Q&As out for public consultation. To ensure that they achieve their goals, these Q&As need to be drawn up in a transparent manner, by giving affected participants the chance to have their say.

Furthermore, with Brexit approaching, ESMA’s powers need to be strengthened, since ESMA alone has the requisite expertise to assess and monitor over time the capital market equivalence granted to third countries.