EU-flash: PRIIPS, EDIS, Basel IV revision and Fintech Task Force

17/11/2016

The European Commission has taken a decision about a 1 year postponement of the coming into effect of the regulation on Packaged Retail and Insurance-based Investment Products.  On 10 November 2016,  rapporteur Esther De Langhe presented her draft report on the European Deposit Insurance Scheme. The next day, the European Parliament voted a resolution about Basel IV. Finally, the European Commission has created a Task Force Financial Technology.

Below you can find a brief summary of these topics.

European Commission extends the application date of the PRIIPs Regulation

On 9 November, the Commission proposed an extension to the date of application of the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs).

This one-year extension is being proposed exceptionally in the interest of ensuring a smooth implementation for European consumers and to ensure legal certainty for the sector.

The European Commission is now working closely with the three European Supervisory Authorities (ESAs) to resubmit the revised Regulatory Technical Standards (RTS). In particular the Commission has now asked the ESAs to make targeted changes in certain areas (i.e. multi-option products, performance scenarios, comprehension alert and presentation of insurance related costs).

The ESAs will now have six weeks to resubmit the revised RTS to the Commission.  The revised PRIIPs framework should be in place during the first half of 2017 and apply as of 1 January 2018.

Full details.

For more information on PRIIPs, see here.

Consideration of draft report on the European Deposit Insurance Scheme

On 10 November, Ester De Langhe (rapporteur EPP) presented her draft report on the European Deposit Insurance Scheme (EDIS) in the European Parliament. Afterwards a debate was held where members of the European Parliament (MEP’s) shared their main concerns on conditionality of EDIS, National deposit guarantee schemes (DGS) and a public backstop.

More information.

EP vote on the Basel IV measures.

We have noted that European policy makers have become aware of the importance of the proposed changes by the Basel Committee for Banking Supervision to the existing Basel III framework, and the consequences these might have in the future on the European banking system and wider economy. It is in this context, that the European Parliament has written a motion for resolution on these upcoming measures.

The current revision of Basel III rules cannot result with increasing significantly capital requirements and it should promote the global level playing, said the economic and Monetary Committee MEPs in their vote on the Basel IV measures, on 11 November 2016.

MEPs also underlined the specificities of the European banking models, with the different sizes and risk profiles that have to be taken into account to maintain their diversity. Respecting the principle of  proportionality and the key role that banks play in financing the European economy is of utmost importance.

MEPs recalled the importance of a risk -based approach, with the same rules being applied to the same risk and reducing the scope of regulatory arbitrage. They underlined the key role of the European and national banking supervisors in ensuring convergence and that the rules would be matching different banking models.

Discussion with the Commission representative and the plenary vote will take place during the November plenary session in Strasbourg. The next meeting of the Basel Committee for Banking Supervision will take place on 28 and 29 November 2016.

More information.

Task force on Financial Technology

On 14 November, the European Commission  launched an internal Task Force on Financial Technology (TFFT) that aims to assess and make the most of innovation in this area, while also developing strategies to address the potential challenges that FinTech poses.

The Commission's goal is to develop a comprehensive strategy on FinTech.

This internal Task Force brings together the expertise of Commission staff across several areas, such as: financial and digital services, digital innovation and security, competition and consumer protection. It will also engage with stakeholders and present policy suggestions and recommendations in the first half of 2017.

Details.

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