Supervisory convergence is a core element of the Single Market and integral to removing barriers to cross-border provision of financial services. It is not enough to have a common rule book, but also the reading of those rules by supervisors and supervisory practices should converge to ensure the Single Market is not hampered by diverging interpretations and gold-plating of EU rules. Whilst we believe that the European Supervisory Authorities ‘ESAs’ have been successful in carrying out their regulatory functions, we are of the view that the strong focus on legislative work has overshadowed their supervisory functions.
The past ten years have seen a constant flow of new legislative proposals in financial regulation. At this juncture, we believe it would be timely for policymakers and regulators to take a step back from new initiatives and focus resources on the consistent implementation of existing legislation across Member States.
EFAMA is also of the view that more coordination is necessary between the three Supervisory Authorities to ensure a level playing field for financial products and services. Unless there is close cooperation between the ESAs, there is a high risk of differing regulatory priorities and an unlevel regulatory playing field to the detriment of end retail consumers. The implementation of PRIIPs and of MiFID II/IDD rules at the beginning of January 2018 is one example where such coordination will be necessary.
Further coordination between the ESAs and National Competent Authorities ‘NCAs’ is also needed to ensure consistent implementation and interpretation of EU legislation.