Lost in the details – European Supervisory Authorities publish workplans

Lost in the details

Any doubts over the sheer volume of technical EU rule-making due to hit across financial services during 2015 was dispelled by the recently published workplans from the European Supervisory Authorities (ESAs).

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European Supervisory Authority Publishes Workplans

Any doubts over the sheer volume of technical EU rule-making due to hit across financial services during 2015 was dispelled by the recently published workplans from the European Supervisory Authorities (ESAs). Over the coming months firms will need to prepare for the technical rules for the major pieces of regulation passed during the closing months of the last EU mandate. Although the overall direction of regulatory changes is known the technical details are crucial so that firms can work through the full impacts rule changes will have on their business and operating models.

Across the European Banking Authority (EBA), European Securities & Markets Authority (ESMA) and European Insurance & Occupational Pensions Authority (EIOPA) hundreds of ‘level 2’ delegated acts, regulatory technical standards (RTS), implementing technical standards (ITS) and guidelines are being drafted to flesh out the high level requirements in primary legislation. Some key elements include:

Workplan Details

The European Banking authority workplan has over 400 individual items of which 120 are flagged as top priority:

  • Capital requirements – supervisory review, risk weighted assets, collateral, leverage, liquidity;
  • Recovery and resolution – group plans, resolvability powers, loss absorbency, own funds, derivatives valuation, resolution funding;
  • Anti-money laundering, deposit guarantees, payments, securities.

The much higher level ESMA workplan has over 200 technical standards covering:

  • MiFID/MiFIR – Markets: pre/post transparency, trading obligation, algo/HFT, transaction reporting;
  • Investor protection: independent advice, inducements, product governance, client assets;
  • Markets abuse, short-selling, securities;
  • Guidelines and convergence EMIR, AIFMD, credit ratings.

The EIOPA workplan reflects that Solvency II is much further along the rulemaking timetable:

  • 19 remaining implementing technical standards and guidelines for Solvency II;
  • Advice on delegated acts for occupational pensions (IORP II);
  • Prepare for technical standards for insurance mediation and insurance products (PRIIPS).

Details will be crucial

The number of acronyms are worthy of a Monty Python sketch, but more seriously, staying on top of the details will be crucial to influencing the fine-tuning of rules. MEPs in the ECON Committee are already preparing to undertake close scrutiny of level 2 measures to ensure the technical details maintain the intention of the primary level legislation. Firms need to be vigilant and continue to contribute consultations when asked to the ESA as this will be the last chance to speak up on concerns. Given the volume of work to be done some slippage in timescales seems inevitable, however delays to rulemaking doesn’t necessarily mean extra time to implement. 2015 will be a crucial year to not get lost in the details and make sure the regulatory change projects are underpinned with technical expertise.

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