[author: Shaun Malone]

On July 11, 2018, the European Parliament’s Committee on Economic and Monetary Affairs (“ECON“) published a press release announcing that it had voted to adopt a draft report relating to the European Commission’s legislative proposals to reform to the European System of Financial Supervision (“ESFS“).

The press release focuses on equivalence decisions taken on equivalence of EU and third-country rules. ECON calls for transparent procedures to govern the adoption, withdrawal or suspension of decisions as to whether third-country rules are equivalent to the EU’s. These decisions are currently taken unilaterally by the Commission, but as they also have a political dimension, ECON believes that they should be subject to appropriate scrutiny by the Parliament and the Council of the EU.

ECON advocates a “structured horizontal framework” for recognising and supervising equivalent third country regimes and empowering European Supervisory Authorities (“ESAs“) to advise the Commission and review developments in third countries. It also calls on the Commission to report annually to the European Parliament on all decisions.

In addition, ECON stresses that the UK’s withdrawal from the EU could potentially have a significant impact on the regulation and supervision of financial services, given the currently close relations between EU member states in this area.