Financial supervision


In January 2011, a new European system of financial supervision (ESFS) was established, replacing the former supervisory committees and creating three supervisory authorities (ESAs): European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA) and a macro-prudential supervisor, the European Systemic Risk Board (ESRB).

On 20 September 2017, the European Commission published a revision of the European Supervisory Authorities framework. The revision, now discussed in the European Parliament and Council, gives new supervisory powers to the ESAs, modifies their governance structure and grants ESMA the role of direct supervisors of managers of funds labelled as EuVECAs and ELTIFs. It also makes changes to the ESAs funding model, by replacing the contributions by national competent authorities with direct contributions from the industry.

The proposal is still under examination by the Council and the European Parliament but it already appears ESMA will not become direct supervisors of EuVECAs and ELTIFs and that many of the other Commission's suggestions will not make it to the final text. 

Invest Europe position

Given the importance of ESMA in setting the regulatory and supervisory framework in which private equity managers operate and of the other ESAs in shaping legislation directly affecting investors, Invest Europe has been actively involved in the review process since the start.

While Invest Europe wants to ensure that ESAs have the resources and expertise that they need to deliver high-quality regulatory oversight, the proposal to reform their financing needs to avoid simply placing additional costs on those market participants who already contribute extensively to the costs of their supervision at national level.

Furthermore, changes to ESMA powers proposed in the revised Regulation risk having an impact on the way our industry is supervised.

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