Tag Archives: Financial services

Plan to harmonise national rules on UCITS depositaries

Outline of the Community (European Union) legislation about Plan to harmonise national rules on UCITS depositaries

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: transactions in securities

Plan to harmonise national rules on UCITS depositaries

The European Commission would like to reduce the divergences that exist between the national rules governing depositaries entrusted with the safe keeping of assets on behalf on investors in undertakings for collective investment in transferable securities (UCITS) * such as unit trusts, common funds and SICAVs. By following a step-by-step approach, the Commission, in cooperation with the national regulators, intends to facilitate the cross-border activity of such UCITS. There are four main areas of action: prevention of conflicts of interest, clarification of the depositary’s liability, convergence of national prudential rules, and moves to enhance invstor transparency and information. UCITS are established in all Member States and their assets total some four thousand billion euros.

Document or Iniciative

Commission Communication to the Council and the European Parliament of 30 March 2004 on “Regulation of UCITS depositaries in the Member States: review and possible developments” [COM(2004) 207 final – Not published in the Official Journal].

Summary

In response to the conclusions of the Economic and Financial Affairs Council in June 2001 calling on it to prepare a report on the regulation of UCITS * depositaries and on the need to amend such regulation, the Commission is examining the existing legal framework. It notes that there are significant differences between Member States as regards, for example, minimum capital requirements, statutory and regulatory obligations, and the liability regimes for depositaries.

If cross-border activity is to expand, these rules must be harmonised. Fund managers and supervisory authorities will want to know exactly the resources and liabilities of depositaries established in other Member States before they are authorised to do business. In addition, investors will need to be better informed.

Favouring a step-by-step approach, the Commission is planning to entrust to regulatory experts in the European Union (EU) four areas of work for the period 2004-06: to promote better prevention of conflicts of interest; to clarify the extent of the depositary’s liability; to promote convergence of prudential requirements, notably those relating to capital and to the taking-up and exercise of the function of depositary; to tighten the standards on investor transparency and information.

The Commission states that a chapter on depositaries will initially be attached to its overall UCITS report under Directive 2001/108/EC in 2005. This chapter will specify to what extent EU legislation on the relationship between fund manager and depositary will have to be strengthened and what degree of harmonisation is needed as regards the typology of eligible depositary institutions and, consequently, their missions and resource requirements. A subsequent report reviewing progress is to be adopted in 2006. It will also evaluate whether is a need to legislate at Community level in order to create a fully-fledged European passport for expanding the cross-border activity of depositaries.

Better prevention of conflicts of interest

Conflicts of interest arise when the interests of investors are not the prime concern of the depositary or fund manager. The Commission is proposing measures to strengthen convergence of the relevant national rules. Such convergence will relate notably to the list of the functions that the fund manager can delegate to the depositary and, conversely, the list of the functions that the depositary may delegate.

Clarification of the extent of the depositary’s liability

The differences in the level and extent of the depositary’s liability are a major obstacle if there is to be a high level of investor protection throughout the EU and if the scope for depositaries to engage in cross-border activities is to be expanded. The Commission thus regards it as essential that there should be a common reading of the main task of the depositary, namely asset safe keeping, and of the specific control duties assigned to the depositary.

Convergence of prudential requirements

The prudential rules governing the taking-up and pursuit of the activity of depositary differ significantly between Member States as there is no common European definition of eligible institutions. The Commission is proposing to align these rules more closely, particularly those relating to capital requirements, by identifying a specific group of institutions subject to prudential supervision.

Enhancement of transparency and investor information

The Commission identifies the areas where public information standards should be strengthened: organisation of the depositary’s tasks, measures to prevent conflicts of interest, the depositary’s liability and all the costs connected to his services.

Background

This communication is in response to the remit assigned to the Commission in June 2001 by he Economic and Financial Affairs Council. The approach it advocates is based on an extensive survey and on an Internet consultation in the autumn of 2002 concerning the different national rules impeding the development of the internal market in the case of UCITS depositaries. The survey identified major disparities between national rules that help to explain the current fragmentation of the market (in virtually 95% of cases UCITS depositaries are national institutions). The internet consultation revealed significant differences in connection, for example, with minimum capital requirements, statutory obligations and the extent of the depositary’s liability. For there to be a genuine internal market in depositaries’ services, these rules need to be brought into line.

Alongside the fund and its manager, the UCITS depositary is the third pillar of the European UCITS system set up by Directive 85/611/EEC.
In 2001 the EU adopted two other UCITS Directives amending Directive 85/611/EEC (one focuses on the instruments in which funds may invest and the other on management companies, thereby setting in place a “European passport” scheme).

Key terms used in the act
UCITS: Depending on the jurisdiction, UCITS can be constituted either under the law of contract (as common funds) or trust law (as trusts) and also under statute, i.e. in corporate form (as investment companies). The Directive may refer to both non-corporate forms under one designation, e.g. as common funds or unit trusts. Importantly, some Member States’ legal frameworks are limited to common funds, i.e. all their UCITS are without legal personality and depend on a designated external fund manager (a management company). UCITS depositary: Directive 85/611/EEC (as amended) defines it simply as an entity entrusted with specific prudential missions and subject to a number of other general provisions. The UK regulatory designation is twofold, according to whether these missions have to be achieved with regard to unit trusts (by a “trustee”) or with regard to an investment company (by a “depositary”). However, for the reader’s convenience, only the term “depositary” has been used in this communication. It should also be noted that the specific regulatory meaning of the designation “UCITS depositary” is precisely based on the peculiar nature of these missions and obligations and, more generally, of the provisions drawn up under UCITS national regulation from Community law. The scope of the concept of “safekeeping” of assets, to which it is particularly related, has thus to be considered in this specific context. UCITS fund manager: This may be either a “management company” or a “self-managed investment company”. Unlike common funds or unit trusts, corporate UCITS, i.e. investment companies, may bring together a vehicle (the fund) and a fund management capacity into the same entity. Directive 2001/107/EC defines them as “investment companies which have not designated a management company” in their instruments of incorporation, i.e. self-managed investment companies. In this Communication, most of the remarks concerning the “fund manager” or “management company” should also be deemed to apply to self-managed investment companies, except that these may not receive any task under a delegation mandate, e.g. from the depositary.

Key terms used in the act

UCITS: Depending on the jurisdiction, UCITS can be constituted either under the law of contract (as common funds) or trust law (as trusts) and also under statute, i.e. in corporate form (as investment companies). The Directive may refer to both non-corporate forms under one designation, e.g. as common funds or unit trusts. Importantly, some Member States’ legal frameworks are limited to common funds, i.e. all their UCITS are without legal personality and depend on a designated external fund manager (a management company).
UCITS depositary: Directive 85/611/EEC (as amended) defines it simply as an entity entrusted with specific prudential missions and subject to a number of other general provisions. The UK regulatory designation is twofold, according to whether these missions have to be achieved with regard to unit trusts (by a “trustee”) or with regard to an investment company (by a “depositary”). However, for the reader’s convenience, only the term “depositary” has been used in this communication.
It should also be noted that the specific regulatory meaning of the designation “UCITS depositary” is precisely based on the peculiar nature of these missions and obligations and, more generally, of the provisions drawn up under UCITS national regulation from Community law. The scope of the concept of “safekeeping” of assets, to which it is particularly related, has thus to be considered in this specific context.
UCITS fund manager: This may be either a “management company” or a “self-managed investment company”. Unlike common funds or unit trusts, corporate UCITS, i.e. investment companies, may bring together a vehicle (the fund) and a fund management capacity into the same entity. Directive 2001/107/EC defines them as “investment companies which have not designated a management company” in their instruments of incorporation, i.e. self-managed investment companies. In this Communication, most of the remarks concerning the “fund manager” or “management company” should also be deemed to apply to self-managed investment companies, except that these may not receive any task under a delegation mandate, e.g. from the depositary.

Credit rating agencies

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Credit rating agencies

Outline of the Community (European Union) legislation about Credit rating agencies

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: transactions in securities

Credit rating agencies

Document or Iniciative

Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (Text with EEA relevance).

Summary

This Regulation aims at regulating the business of credit rating agencies with a view to protecting investors and European financial markets against the risk of malpractice. It lays down the conditions for issuing credit ratings, as well as rules related to registering and monitoring credit rating agencies.

Which credit ratings does the Regulation apply to?

This Regulation applies to credit ratings which are issued by credit rating agencies registered in the European Union (EC) and which are communicated to the public or distributed by subscription.

How are credit ratings used?

Credit ratings issued by credit rating agencies based in the EU are used by investors, borrowers, issuers and public administrations to help them make investment and financial decisions. These ratings may be used by the banks as a reference for calculating their capital requirements for solvency purposes or to help investors to assess the risks in their investment activity.

Two procedures allow the use, in the EU, of ratings issued by credit agencies established in third countries. Firstly, credit rating agencies have the option to give their endorsement to credit ratings issued outside of the EU, on the condition that:

the credit rating agency has carried out preliminary checks and can continue to demonstrate to the European Securities and Markets Authority (ESMA) that the credit ratings meet legislative requirements which are at least as strict as those applicable in the EU;
the ability of ESMA to assess and monitor compliance with the requirements is not limited;
the credit rating agency shall provide ESMA with all the information it requires;
the credit rating agency established in the third country is authorised or registered, and is subject to supervision, in that third country;
a cooperation arrangement has been concluded between ESMA and the relevant competent authority of the credit rating agency established in a third country.

Secondly, ratings issued by a small credit rating agency established in a third country, but not established in the EU, can be used in the European Union on the condition that:

the credit rating agency is authorised or registered in and is subject to supervision in that third country;
the Commission has adopted an equivalence decision recognising the legal and supervisory framework for ratings agencies in the third country;
the cooperation arrangements with the third country exist and are operational;
the credit ratings issued by the credit rating agency and its credit rating activities are not of systemic importance to the financial stability or integrity of the financial markets of one or more Member States;
the credit rating agency is certified in the Union.

Credit rating agencies may request certification from ESMA.

Under which conditions are credit ratings issued?

The issuing of credit ratings should not be affected by any conflict of interest or business relationship. In order to ensure this, credit rating agencies are subject to specific organisational and operational requirements. The administrative or supervisory board of the agency shall ensure independence of the rating process. It shall ensure that conflicts of interest are properly identified, managed and disclosed, and finally that the credit rating agency complies with the requirements of the Regulation. ESMA may however exempt a credit agency from certain requirements in view of the nature, scale and complexity of its business.

The methodologies of credit rating agencies and the descriptions of models and key rating assumptions, such as mathematical or correlation assumptions, are published in a manner permitting comprehensive review. In this way, agencies shall guarantee the quality of the credit ratings that they produce, and the transparency of methods used.

The credit rating agencies shall ensure regular monitoring of credit ratings and shall review this at least once a year. They shall produce general and periodic disclosures, as well as a transparency report. Agencies shall send data to ESMA on their past performance so that it can be made available to the public.

How is monitoring of credit rating activities carried out?

Credit rating agencies established in the EU must register with ESMA. They will send their application for registration to ESMA, providing, amongst other things, information on their headquarters, their legal status, their methods of issuing ratings and their policies and procedures on managing conflicts of interest. ESMA has 45 working days to examine their application.

In the case of an application for registration made by a group of agencies, ESMA decides whether to grant or refuse registration. In this case, it has 55 working days to reach a decision.

ESMA is responsible for drawing up guidelines in consultation with the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA). It is required to publish an annual report on the application of this Regulation.

ESMA carries out ongoing surveillance of credit rating agencies, particularly of their rating methodologies. It must not interfere with the content of the credit ratings or with the methodologies used by the credit rating agencies. If it identifies an infringement (listed in Annex III), ESMA appoints an independent investigator to open an inquiry, at the end of which a dossier is produced presenting his/her conclusions. ESMA then decides whether to fine the credit rating agency or to impose one of the following penalties:

withdraw the registration of the credit rating agency;
temporarily prohibit the agency from issuing credit ratings;
suspend the use of the credit ratings;
require the agency to stop the infringement;
issue public notices.

ESMA is required to cooperate with EBA, EIOPA and the competent authorities and sectoral competent authorities with regard to exchanging information. It has the right to send confidential information to the following bodies:

the central banks;
the European Central Bank;
the European Systemic Risk Board;
public authorities.

Context

The 2008 financial crisis and the absence of national regulations led the European Commission to establish common rules in order to better regulate the activities of credit rating agencies. In February 2009, the “Larosière” Expert Group highlighted the need to strengthen the framework for monitoring the financial sector, which enabled the creation of a European System of Financial Supervision (ESFS) comprising three European supervisory authorities and a Systemic Risk Board. The role of ESMA also enables the monitoring of credit rating agencies to be strengthened.

Key terms of the Act
Credit rating: an opinion regarding the creditworthiness of an entity, a debt or financial obligation, debt security, preferred share or other financial instrument, or of an issuer of such debt or financial obligation, debt security, preferred share or other financial instrument, issued using an established and defined ranking system of rating categories; Credit rating agency: a legal person whose occupation includes the issuing of credit ratings on a professional basis; Rating category: a rating symbol, such as a letter or numerical symbol which might be accompanied by appending identifying characters, used in a credit rating to provide a relative measure of risk to distinguish the different risk characteristics of the types of rated entities, issuers and financial instruments or other assets.

Key terms of the Act

Credit rating: an opinion regarding the creditworthiness of an entity, a debt or financial obligation, debt security, preferred share or other financial instrument, or of an issuer of such debt or financial obligation, debt security, preferred share or other financial instrument, issued using an established and defined ranking system of rating categories;
Credit rating agency: a legal person whose occupation includes the issuing of credit ratings on a professional basis;
Rating category: a rating symbol, such as a letter or numerical symbol which might be accompanied by appending identifying characters, used in a credit rating to provide a relative measure of risk to distinguish the different risk characteristics of the types of rated entities, issuers and financial instruments or other assets.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation No 1060/2009	7.12.2009	–	OJ L 302 of 17.11.2009

Amending act(s)	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation No 513/2011	1.6.2011	–	OJ L 145 of 31.5.2011
Directive 2011/61/EU	21.7.2011	–	OJ L 17 of 1.7.2011

Securities markets: Advisory, regulatory and supervisory committee

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Securities markets: Advisory, regulatory and supervisory committee

Outline of the Community (European Union) legislation about Securities markets: Advisory, regulatory and supervisory committee

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: transactions in securities

Securities markets: Advisory, regulatory and supervisory committee

Acts

Commission Decision 2001/528/EC of 6 June 2001 establishing the European Securities Committee (Text with EEA relevance) [See amending acts].

Summary

The establishment of the supervisory and regulatory committees is designed to give practical impetus to the achievement of a single market in financial services in accordance with the framework spelt out in the Financial Services Action Plan (FSAP).

Creation of the ESC

The ESC was set up in 2001 to help improve the regulation and supervision of securities markets. Its creation meets the needs of the four-level regulatory framework advocated in the report by the Committee of Wise Men, the Lamfalussy report in 2001. As an advisory body, it participates in preparing and applying the measures for implementing the framework principles laid down in the relevant directives and regulations. The Lamfalussy process was re-examined in 2007. As part of the re-examination of this process, it seemed necessary to enhance the action of these committees and to establish a strengthened legal framework.

As it oversees developments on securities markets, this advisory committee participates in drawing up the implementing measures for the framework principles. It is also responsible for assessing risks which represent a major factor in financial stability.

Role of the ESC

The ESC is, first and foremost, a body for consultation and reflection. The committee is principally responsible for advising the Commission on policy issues and draft proposals which it could adopt in the field of securities.

Composition of the ESC

The ESC is composed of high-level representatives of Member States and is chaired by a representative of the Commission. The committee may invite experts and observers to attend its meetings.

Context

The interdependency of European Union financial systems and the disappearance of a distinction between bank-related activities, those related to securities and to insurance complicates monitoring both at national and European level. It is therefore essential to introduce a system to detect any cross-border and cross-sectoral risks rapidly so as to preserve financial stability.

Decision 2009/77/EC repeals Decision 2001/527/EC.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Decision 2001/528/EC	7.6.2001	–	OJ L 191, 13.7.2001

Amending act(s)	Entry into force	Deadline for transposition in the Member States	Official Journal
Decision 2004/8/EC	13.4.2005	–	OJ L 3, 7.1.2004

Insurance and occupational pensions: regulatory and supervisory committee

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Insurance and occupational pensions: regulatory and supervisory committee

Outline of the Community (European Union) legislation about Insurance and occupational pensions: regulatory and supervisory committee

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services > Financial services: insurance

Insurance and occupational pensions: regulatory and supervisory committee

Acts

Commission Decision 2004/9/EC of 5 November 2003 establishing the European Insurance and Occupational Pensions Committee (Text with EEA relevance).

Summary

The establishment of a supervisory and regulatory committee shall contribute to the realisation of a single market in financial services in accordance with the framework defined by the Financial Services Action Plan (FSAP).

Creation of the EIOPC

The EIOPC contributes to improving regulation in the fields of insurance, reinsurance and occupational insurance. Its creation responds to the need to extend beyond the securities markets the four-level regulatory framework advocated in the report by the Committee of Wise Men, called the Lamfalussy report in 2001. As an advisory body, it participates in preparing and applying the measures for implementing the framework principles laid down in the relevant directives and regulations. The Lamfalussy process was re-examined in 2007. During the re-examination of this process, it was deemed necessary to enhance the action of this committee and to introduce a strengthened legal framework.

As it oversees developments in the fields of insurance, reinsurance and occupational pensions, the advisory committee participates in drawing up the measures implementing the framework principles. However, it does not have the power to address issues of labour law or social law.

The role of the EIOPC

The EIOPC is, first and foremost, an advisory body. Its main task is to advise the Commission on legislative proposals and existing legislation governing insurance, reinsurance and occupational pensions.

Context

The interdependency of European Union financial systems and the disappearance of the distinction between bank-related activities and those related to securities and insurance complicate supervision both at national and European levels. A system is therefore needed in order to identify potential risks, across borders and across sectors, at an early stage so as to preserve financial stability.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Decision 2004/9/EC	13.4.2005	–	OJ L 3, 7.1.2004

European Systemic Risk Board

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European Systemic Risk Board

Outline of the Community (European Union) legislation about European Systemic Risk Board

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

European Systemic Risk Board

Document or Iniciative

Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board.

Summary

This Regulation establishes the European Systemic Risk Board * (ESRB). It forms part of the package of measures put in place to reform the European System of Financial Supervision (ESFS) which creates three authorities to supervise financial activities:

the European Banking Authority;
the European Insurance and Occupational Pensions Authority;
the European Securities and Markets Authority.

The package also reforms existing legislation on financial matters with the Omnibus Directive and includes the Regulation conferring specific tasks upon the European Central Bank.

Supervision of the financial system * of the European Union (EU) is further reinforced by:

the Joint Committee of the European Supervisory Authorities;
the competent or supervisory authorities of Member States.

Objectives of the ESRB

The ESRB is responsible for the macro-prudential oversight of the financial system in the EU. One of its main objectives is to prevent and mitigate systemic risks which might prejudice the financial stability of the EU. In this regard, the ESRB must in particular:

determine and collect the information necessary for its action;
identify systemic risks and prioritise them;
issue warnings and make them public if necessary;
recommend measures to be taken once the risks have been identified.

Organisation of the ESRB

The ESRB is composed of:

a General Board to ensure the performance of tasks;
a Steering Committee which contributes to the decision-making process;
a Secretariat responsible for day-to-day business;
an Advisory Scientific Committee and an Advisory Technical Committee to provide advice and assistance.

The President of the European Central Bank (ECB) shall chair the ESRB for a term of five years. The Chair will perform his duties assisted by two Vice-Chairs, the first of which shall be elected by and from the General Council of the ECB, while the second shall be the Chair of the Joint Committee.

Members of the ESRB shall have an obligation to comply with the principles of impartiality and professional secrecy when performing their duties, including after their duties have ceased.

Meetings of the General Board shall take place four times a year, preceded by meetings of the Steering Committee. The Chair of the ESRB may convene extraordinary meetings.

The ESRB may also seek the advice of the private sector when necessary.

Warnings and recommendations

The ESRB may issue warnings and make recommendations concerning remedial action to be adopted, or even legislative initiatives. Such recommendations may be addressed:

to the EU;
to one or several Member States;
to one or several European supervisory authorities;
to one or several national supervisory authorities.

Recommendations relating to measures to be adopted shall be issued according to a colour code which varies according to the level of risk. If the ESRB observes that its recommendations have not been followed, it shall, confidentially, inform the addressees, the Council and, where relevant, the European Supervisory Authority concerned.

Key terms of the Act
Systemic risk: a risk of disruption in the financial system with the potential to have serious negative consequences for the internal market and the real economy. Financial system: all financial institutions, markets, products and market infrastructures.

Reference

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation (EU) No 1092/2010	16.12.2010	–	OJ L 331, 15.12.2010

Related Acts

Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board [Official Journal L 331 of 15.12.2010].

Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) Text with EEA relevance [OJ L 331 of 15.12.2010].

Financial services: general framework

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Financial services: general framework

Outline of the Community (European Union) legislation about Financial services: general framework

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

Financial services: general framework

The integration of financial markets means that capital can be allocated more efficiently and makes for better long term economic performance. The European Union has established a legislative framework geared to strengthening the financial services sector, in particular in order to improve the performance of financial operators and boost liquidity, competition and financial stability.
European policy on financial services shares some concerns with that on the free movement of capital when it comes to facilitating, and improving the security of, financial activity. Such issues stem in particular from the cross border character of this activity, but also from the massive growth in services based on new technologies.
Financial services policy covers three main sectors: the banking system, insurance and securities. Apart from laying down rules for operators and investors (banks, insurance and securities), the Union also intends to give greater protection to consumers in specific areas such as retail financial services.

Financial crisis and taxation of the financial sector

Financial transaction tax
Taxation of the financial sector
Framework for crisis management in the financial sector
Reforming the financial system

Financial supervision

European Systemic Risk Board
European Banking Authority (EBA)
European Insurance and Occupational Pensions Authority (EIOPA)
European Securities and Markets Authority (ESMA)
European financial supervision

General provisions

Community programme to support financial services, financial reporting and auditing (2010-2013)
Markets in financial instruments (Proposal)
Markets in financial instruments (MiFID) and investment services
International accounting standards (IAS)
Agreement on the European Economic Area
Framework for action
Financial Services Action Plan (FSAP)
White Paper on Financial Services Policy (2005-2010)
Review of the Lamfalussy process

Specific provisions

OTC derivatives, central counterparties and trade repositories
Derivatives
Packaged retail investment products
Investment research and financial analysts
World Trade Organisation
Financial education
The prevention of and fight against organised crime in the financial sector
Distance contracts for financial services
Corporate and financial malpractice

Remuneration policies

Remuneration policies in the financial services sector
Regime for the remuneration of directors of listed companies

Financial conglomerates

Financial conglomerates

Institutions for occupational retirement provision

Institutions for occupational retirement provision

European Banking Committee

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European Banking Committee

Outline of the Community (European Union) legislation about European Banking Committee

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services > Financial services: banking

European Banking Committee

Acts

Commission Decision 2004/10/EC of 5 November 2003, establishing the European Banking Committee (Text with EEA relevance).

Summary

The establishing of a supervisory and regulatory committee aims at further facilitating the completion of the single market for financial services.

The EBC

The European Banking Committee (CBE) replaces the Banking Advisory Committee (established by Directive 77/78/EC in 1978). It is run by the European Commission and represents “Level 2” in the current Financial Services Supervision and Committee Architecture.

The EBC has an advisory and legislative role. It is central to the preparation and implementation of European banking legislation. It advises the Commission on political issues concerning banking activities and issues opinions on the proposals they present.

The EBC is composed of various participants. Members are high-level representatives from Member States, most particularly from finance ministries. The European Central Bank and the European Banking Authority participate as observers. The Commission may invite other experts and observers, such as representatives of the European Economic Area (EEA) countries.

Context

The EBC contributes to improving banking regulation and to supervising the application of European legislation in this field. As a consultative body, the committee intervenes in the preparation and application of implementing measures for framework principles defined by Directives and Regulations.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Decision 2004/10/EC	13.4.2005	–	OJ L 3, 7.1.2004