Scrutiny Information

Scrutiny date: 02/02/2018

Subsidiarity Concern:

No Important information to exchange

No Veto

Information on parliamentary scrutiny

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  Political Dialogue

17/08/2018 | Reply to Bundesrat - COM20170536

02/02/2018 | Scrutiny results - COM20170536

The ESAs have provided an effective, consistent and coherent supervision over European financial markets for seven years now. Hence, the Bundesrat shares the Commission’s view that, in light of practical experiences gained, as well as legal and market developments, the ESAs’ legal framework requires some readjustments. They should have adequate governance structures and financial resources at their disposal. The Bundesrat highlights the importance of a multilevel supervisory structure – including both, national and EU authorities. In the current system, the latter have, in recent years, and often without a specific mandate, created numerous detailed level 3 regulations for the supervisory practice. These regulations have amounted to a comprehensive legal framework that, for many regionally oriented SMEs, is hardly manageable and utterly disproportionate. The Bundesrat, at this point, therefore rejects the proposal’s plan for an expansion of ESAs into a “supervision of the supervision”, as the European authorities need to continuously be carried by its members and member states’ influence be expanded. The proposed expansion of the ESAs’ competencies, as well as the radical change to their governance and funding structures, is met with concern in regards of the principles of subsidiarity and proportionality.

The Bundesrat welcomes the proposal’s focus on sustainability and financial innovations. It strongly objects to, however, the introduction of “Strategic Supervisory Plans”, as these would permit the Executive Board to effectively dictate the member states’ supervisory activity.

Level 3 regulations (guidelines and recommendations, in particular) effectively constitute binding law. As they often rely on a self-mandate by the ESAs, legislative reservation and democratic principles require restriction and control mechanisms. The European Parliament and the Council should, in controlling the ESAs’ activity in emitting technical regulations, be authorized to adopt them also with amendments.

Direct requests for information by the ESAs towards financial market actors need to be limited to extraordinary circumstances. A transfer of responsibilities for the European Venture Capital Fund (EuVECA), the European Social Entrepreneurship Fund (EuSEF) and the European Long-Term Investment Fund (ELTIF), in particular, does not respect the overall national imprint of these funds. In addition, the presumed cost saving effect is not sufficiently proven.
The Bundesrat favours maintaining the current financial structure of the ESAs. Eliminating it in favour of direct contributions by the financial sector bears the risk that the ESAs might grow without the corrective of national supervision.

Contact points for EU matters

IPEX Correspondents:
Phone: +49 (0) 301 891 00 471  Email Mr. Michael Hoessl
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