FIA has responded to the European Commission's consultation on EU capital markets integration. The response calls for simplification and burden reduction, makes recommendations on post-trading issues, distributed ledger technology and asset tokenisation, and adds to the debate on supervision.
While FIA appreciates the speed with which the Commission intends to make a difference with this mandate, the association recommends that the Commission discusses with all stakeholders how capital markets would best serve the real economy and what role derivatives have to play.
To simplify and improve regulatory processes, FIA proposes specific measures, such as better-aligned implementation timelines across legislative levels, improved public consultation procedures, meaningful cost-benefit analyses, and harmonisation of regulations across EU member states.
FIA also calls for clarity in the scope of regulations and advocates for delaying the application of Level 1 requirements until corresponding Level 2 standards are finalised. The response stresses the importance of legal certainty and proportionality, warning that premature rule enforcement creates compliance challenges and undermines regulatory objectives. These changes are aligned with the EU’s goals of reducing administrative burdens and streamlining regulation.
More meaningful regulatory forbearance powers to temporarily suspend the application of specific regulatory requirements in certain circumstances and within a reasonable timeframe would add to the regulatory certainty and stability that the industry needs.
With reporting simplification, FIA urges a holistic review of overlapping EU reporting regimes and improved coordination among global regulators to reduce duplicative obligations. FIA supports careful and appropriate data sharing mechanisms between financial regulators to enhance oversight and market abuse detection, but cautions against unnecessary reporting expansion that could result in regulatory overreach and reporting duplication.
Finally, FIA warns against breaking up certain structures that were established in the past decade that continue to work well. While targeted changes should be made, FIA calls for some form of regulatory stability that will free up time and cost that can be used for firms to develop innovative products, technologies and strategies.
Read the response in full.
