A progress report on future EU regulation
Michel Barnier, the European Commissioner for Internal Market and Services, has produced a “progress report” (the Report) on “Regulating financial services for sustainable growth”. The Report describes the Commission’s work on reforming the regulation of financial services.
Mr Barnier believes that ”the exceptional nature of the [financial] crisis justifies a far-reaching and radical reform which sets the right incentives and infrastructures for a resilient European financial system in the future”. That this reform programme will be far-reaching is not in doubt. The Report contains a summary of the Commission’s wide-ranging and intensive activities around:
- Financial institutions: “improved stability and governance” (described in paragraph 3.1 of the Report)
- Markets: “improved efficiency, integrity, liquidity and transparency” (paragraph 3.2)
- The consumer (paragraph 4)
- The reform of financial supervision in Europe (paragraph 5).
The European Commission is preparing sixteen legislative initiatives which will be adopted by the end of 2011, with the majority, according to the Report, to be adopted in the first half of the year. These are all “level 1″ proposals (i.e. framework legislation that is voted on by the European Council and Parliament) and include:
- Corporate governance in financial institutions legislation.
- Regulation on short selling and credit default swaps.
- Revision of the Market Abuse Directive.
- Review of the Markets in Financial Instruments Directive.
- The new UCITS directive (UCITS IV).
- Solvency II implementing measures.
- OTC derivatives market infrastructure regulation.
An indicative list of outstanding and forthcoming legislative proposals is set out at Annex 1 of the Report.
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