![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
European regulators attain broad power equivalency
CESR report claims minor divergence between national supervisors
The level of supervisory equivalence between financial regulators in different European states under the Prospectus and Market Abuse Directives is high although some discrepancies remain, a new report claims.
The paper, An evaluation of equivalence of supervisory powers in the EU under the Market Abuse Directive and the Prospectus Directive, from the Committee of European Securities Regulators (CESR) found that the general degree of equivalency between the powers given to competent authorities in member states was high – on average 93%.
Specifically, the overall picture is more satisfactory for the Prospectus Directive, which sets out the disclosure obligations for issuers of securities that are offered to the public in the EU, than for the Market Abuse Directive (MAD), which defines what behaviour is considered market abuse, such as insider dealing and market manipulation.
CESR’s findings were mixed on supervisors’ ability to issue practical rules, with less than 85% equivalence. Several authorities were found to lack the ability to issue practical rules to properly apply the Directives.
The cross-border supervisory co-operation powers have been significantly harmonised although again, some areas of improvement remain, particularly over the capacity to open an investigation solely on a request by a foreign authority.
Under the Prospectus Directive, weak points remain in supervisors’ capacity to disclose supervisory information to the public regarding registering qualified investors and the publication of summaries of prospectuses.
Similarly, under the MAD, with regard to the disclosure of measures or sanctions, authorities are generally well-equipped with supervisory, investigative and sanctioning powers to be imposed due to infringements.
The paper is the result of a mapping exercise CESR launched last year to assess the supervisory powers that had been given to CESR members following the entry into force of the Market Abuse and the Prospectus Directives. The purpose of the study was to assess whether the competent authorities benefit from equivalent supervisory powers.
The findings of these reports have been submitted by CESR to the Financial Services Committee. Similar exercises will be conducted by the Review Panel in relation to the Transparency Directive and the Markets in Financial Instruments Directive.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Honey, I shrunk the Fed. (Not a sci-fi fantasy)
Promoting the discount window may be the Fed’s key to shrinking its $7trn balance sheet, says Bill Nelson
Insurance double-hatters like Apollo can expect more scrutiny
Regulators are homing in on conflicts of interests at private-equity-owned insurers
The boy who cried ‘outlier’: false alarms could dog EBA test
Analysis reveals banks deemed outliers by net income test are profitable post-shock, so how useful is the test?
Modernising compliance functions with regtech
Regtech addresses the complexities of regulatory requirements, offering innovative tools to modernise compliance functions, streamline processes and enhance efficiency. This article explores its role in compliance and reporting within the banking sector,…
For the Fed discount window, destigmatisation starts at home
US supervisors must change tack to encourage central bank liquidity utilisation, writes Bill Nelson
Study finds just 10 banks plan to apply for FRTB models
Research provides extra insight on reasons for decline in internal models
EU banks hedge net interest income to pass new IRRBB test
Would-be outliers look to cut sensitivity of cashflows to rate moves, but at what cost?
Banks cry foul over shock decision from Basel Committee
Asset and liability management professionals question severity of criteria in revised IRRBB tests