Most EU finance ministers supported supervisory compromise — Politico Europe
In Luxembourg, the capital of Luxembourg, most EU finance ministers supported the EU Council’s position on the MISP package of draft laws aimed at integrating and strengthening oversight of the bloc’s financial markets. The compromise provides for expanding the powers of the European Securities and Markets Authority (ESMA) to supervise major market participants, Politico reports.
European Commission’s remarks
The European Commission criticized the agreed approach, saying it does not provide ESMA with the autonomy needed for effective supervision. European Commissioner for Financial Services and the Savings and Investments Union Maria Luís Albuquerque stressed that the compromise falls significantly short of the necessary level of ambition.
France had sought to strengthen the regulator’s executive powers ahead of the meeting. Paris objected to a rule under which nine national supervisory authorities could demand additional consideration of draft decisions by ESMA’s executive board. The Irish EU presidency changed the wording, limiting the ability to delay decisions and preserving ESMA’s right to act in emergency situations. At the same time, the compromise satisfied neither the European Commission nor European Central Bank President Christine Lagarde.
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Exemptions for exchanges and ESMA funding
A separate contentious part of the agreement was exemptions from direct EU supervision for stock exchanges that do not meet the established thresholds for trading activity and cross-border reach. According to the publication, Germany’s Deutsche Börse and Spain’s Bolsas y Mercados Españoles could benefit from such exemptions. Representatives of smaller EU countries criticized this approach, believing it gives an advantage to the bloc’s largest states.
Belgium opposed the exemptions because Brussels-based securities depository Euroclear is expected to come under direct EU supervision and pay supervisory fees. Germany supported a provision to review the exemptions two years after the new rules begin to apply, although any changes would require new legislation.
The compromise also provides that the EU budget will cover 60% of ESMA’s costs not covered by industry fees, while national supervisory authorities will cover the remaining 40%. The European Parliament must agree on its own position, after which negotiations on the final text may begin.
