FIA has published a position paper welcoming the European Commission’s Market Integration and Supervision Package (MISP), a central pillar of the EU’s Savings and Investments Union agenda that aims to strengthen the integration, resilience and global competitiveness of EU capital markets.
FIA’s recommendations are intended to support co-legislators in delivering a supervisory architecture that is simpler, more coherent and fit for globally interconnected markets, while preserving the EU’s high standards of financial stability, market integrity and investor protection.
Highlights of the paper include:
- FIA supports the MISP’s goal to make EU capital markets more integrated, resilient and competitive. Policymakers should ensure the reforms genuinely simplify rather than add duplicative processes to the supervisory landscape and higher costs on firms.
- FIA recommends supervisory models that would ensure a single point of interaction for EU CCPs while maintaining appropriate regulatory input from all relevant authorities.
- ESMA should receive a secondary objective to consider the competitiveness of EU markets when drafting technical rules. This can support firms operating in Europe without weakening financial stability or investor protection.
- Removing ESMA’s ability to issue Q&As would reduce legal certainty and supervisory convergence, especially in fast-moving and technical markets.
- ESMA should have stronger and more flexible no-action powers than currently proposed under the MISP. Moreover, the Commission should be able, in limited cases, to temporarily pause Level 1 rules when critical implementation challenges arise.
- EU rules must be modernised and aligned to support innovation, including adapting EMIR to enable distributed ledger technology take-up.
- Conversion of the Settlement Finality Directive into a Regulation is a step in the right direction, as it would reduce national divergence, forum-shopping and strengthen legal certainty. To achieve these objectives, a number of technical amendments should be made to the Commission’s proposal for SFR.
In this context, FIA also emphasises the importance of meaningful stakeholder engagement and appropriate impact assessment as negotiations progress.
