FINAL EACT Response to EC Consultation Cumulative Impact of Financial Reform

Meeting with DG FISMA regarding the Commission call for evidence on EU financial services regulation framework

8 March 2016

Attendees:

Commission:

Martin Spolc, Head of Unit Directorate B2 Economic analysis and evaluation
EACT:

Main points discussed:

Mr Spolc explained the current status and the next steps of the call for evidence:
The Commission is currently going through the responses and evaluating how robust the evidence is
Generally speaking there are three categories of claims made in the consultation:
Claims already made in the past and known to the Commission; no (immediate) action planned by the Commission
Claims where there is evidence that a problem exists and action will/should be taken (not immediately in all cases)
Claims that need further evaluation
The initial assessment will be finalised by end-March; a more in-depth assessment and report with conclusions and follow-up actions (not necessarily all precisely defined actions but will also include themes that will require further work and analysis) by end-July
There will be a public hearing in May in which Mr Spolc recommended the EACT to participate
Big themes identified to date:
Proportionality
Impact on the financing of the real economy
Interactions between different legislative texts; duplications etc
Undue regulatory burden
Concerning the EACT submission:
Mr Spolc very much welcomed the submission, which he said provides a unique angle to the topic; he stated that such voices are needed in the debate and should be heard, and he appreciated that the EACT was one of the few respondents who had provided “something extra”, i.e. the survey conducted with the EACT membership
Concerning EMIR:
Reporting problems are known to the Commission and will be taken into account in the EMIR review plan
The Commission is aware of the “dangers” of the ESMA proposals of eliminating the clearing thresholds
KYC and increased documentation burden: there is a workstream within the Commission that is working on data standardisation; Mr Spolc said he would check whether it would be possible to extend that to KYC etc.
CRD IV impact on pricing of derivatives, lending, short-term deposit-taking, cash management products: the Commission seems to understand and agree that some of the impacts are not acceptable, but there is need for further analysis and discussion before proposing any changes.
We mentioned the possibility of giving ESAs and other regulators the ability to issue ‘no action letters’, in particular in cases where it emerges that a piece of legislation has clear unintended consequences; Mr Spolc said that we were not the first ones to mention this and that the topic has already been discussed within the Commission and with the ESAs, but he did not indicate whether the Commission would be planning to implement this
Other: Mr Spolc invited the EACT to reflect on cases where the interaction of two or more pieces of legislation created an issue, which did not exist when taken independently.