The legislative review of the European Commission proposal amending, amongst other things, the regulations establishing the European Supervisory Authorities (so called “ESAs review proposal”) continues in the Council and in the European Parliament.

The Commission’s proposal has given rise to several contentious issues, in particular some Member States have raised concerns about the undue and excessive transfer of competences to the ESAs from the national competent authorities. Today, Member State representatives met to continue discussions on the legislative package. The following are understood to have been discussed:

• the progress of the legislative review process and the main elements of the prospective compromise amongst the Member States;
• the proposal to grant ESMA with temporary regulatory forbearance powers in respect of Level 2 measures by virtue of the introduction of a new legal tool (“suspensory technical standards”); and
• the proposal to streamline the Q&A process, including the role of stakeholder groups and the mandatory consultation thereof.

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has been working on its own position on the proposal. The Parliament’s draft report was discussed within the committee for the first time on 11 July 2018 and the deadline for amendments was 31 August 2018. Over 500 amendments to the draft report were submitted by ECON members. These include proposed amendments in support for providing the ESAs with the competence to grant regulatory forbearance akin to their US counterparts. As a result of the recent resignation and departure from the European Parliament of Burkard Balz, co-rapporteur on the ESAs review proposal, Othmar Karas (AT, EPP) was appointed as his replacement.

The next Council Working Party will be held in October. ECON will discuss the draft amendments on 1 October 2018 and the report will be put to a final committee vote on 5 November 2018.