In April 2018, we blogged that the European Parliament’s Committee on Economic and Monetary Affairs (ECON) had published a draft report on relationships between the EU and third countries concerning financial services regulation and supervision.
In particular the draft report contained a motion for a European Parliament resolution which among other things argued that the EU’s process for granting equivalence lacked certainty and sufficient transparency. It also called for the European Parliament to scrutinise equivalence decisions in the area of financial services including that the institution should be consulted before any equivalence decision is withdrawn.
The draft report was further reviewed in May, and then in July 2018 we published a further blog reporting that ECON MEPs had voted in favour of adopting it. A copy of the report as voted for by ECON MEPs has now been published.
The European Parliament’s procedure file on this initiative, by rapporteur Brian Hayes MEP, indicates that the European Parliament is expected to debate the matter on 10 September 2018 and then vote on it the next day.
In the report, the European Parliament recommends that:
- through the EU’s relationship with third countries on financial services regulation and supervision, the EU should enhance tax cooperation with third countries, in accordance with international and EU standards;
- the process for granting equivalence to a third country in the area of financial services should be subject to appropriate scrutiny by European Parliament and the European Council;
- a consistent framework for the ongoing supervision of an equivalent third country regime should be developed;
- the European Supervisory Authorities (ESAs) should be equipped with the power to advise the European Commission and review regulatory and supervisory developments in third countries, and that the European Parliament should be kept informed of ongoing regulatory and supervisory reviews of third countries;
- the European Commission should provide a clear framework for a transparent, coherent and consistent application of equivalence procedures to introduce an improved process for the determination, review, suspension / withdrawal of equivalence;
- equivalence decisions should be subject to ongoing monitoring by the relevant ESA and for the outcome of such monitoring to be made public; and
- the joint EU-US Financial Regulatory Forum be upgraded to include more regular meetings with the aim of a more frequent and consistent coordination.