On 9 February 2021, the European Supervisory Authorities (ESAs) published a letter they had sent to the Chair of ECON, the President of the ECOFIN Council and the EU Commissioner in charge of Financial stability, financial services and capital markets. The letter concerns the legislative proposal for a regulation on digital operational resilience for the financial sector (DORA). In particular, the letter sets out the ESAs views on how to most efficiently take forward important aspects of the governance and operational processes of the oversight framework for critical third party service providers and the application of the proportionality principle in DORA.
Among other things the ESAs state that the current proposal raises challenges on the practical functioning of the oversight framework, especially the complexity of the governance and decision-making process
between the Joint Committee of the ESAs, the Boards of Supervisors of the ESAs and the Oversight Forum (which would operate as a sub-committee of the Joint Committee). In addition, the ESAs state that considering the highly technical nature of the entities falling under the scope of oversight, the proposed composition of the Oversight Forum may face challenges from a technical capacity and expertise perspective as it will need to be competent to discuss and address quite technical IT issues related to the oversight activities.
In relation to proportionality, the ESAs note that the current legislative proposal excludes only micro-enterprises from the application of certain requirements and does not make any reference to sectoral legislation when defining the financial entities in scope. Given this, the ESAs suggest a more comprehensive inclusion of the principle of proportionality in a more flexible way across the legal act.