2014年-EBA欧洲银行管理局_JC-2012-88-FINAL--ESAs-Joint-response-to-the-COM-call-for-advice-on-fund_84页_676kb

Summary of EBA, EIOPA and ESMA's Response to the European Commission's Call for Advice on the Fundamental Review of the Financial Conglomerates Directive

Core Content

The European Supervisory Authorities (ESAs) — EBA, EIOPA, and ESMA — responded to the European Commission's Call for Advice (CfA) on the Fundamental Review of the Financial Conglomerates Directive (FICOD) in 2011. Their advice was aimed at enhancing the scope of FICOD, improving internal governance and sanctions, and increasing supervisory empowerment to ensure more effective group-wide supervision of financial conglomerates.

Main Recommendations

1. Enlarging the Supervisory Perimeter

• Recommendation 1: The perimeter of supervision should be expanded to include more entities, particularly non-regulated ones, to avoid regulatory arbitrage and ensure comprehensive risk assessment.
• Recommendation 4: The European Commission should identify and define an ultimate responsible entity for the financial conglomerate based on control, market dominance, and the ability to fulfill duties towards subsidiaries and supervisors.
• Recommendation 5: The ultimate responsible entity should have a coordinating and directing role in group supervision, and existing prudential requirements should apply to it, whether it is a regulated or unregulated entity.

2. Supervisory Tools and Empowerment

• Recommendation 3: Supervisors should have the ability to use the following tools:
  • Tool 1: Require the creation of an intermediate financial holding company to oversee all regulated entities.
  • Tool 2: Designate a single point of entry at the top of unregulated entities for supervision purposes.
  • Tool 3: Designate a specific regulated entity as the point of entry, especially if the top entity is not enforceable.
• Recommendation 6: The Commission should establish an enforcement regime targeting the ultimate responsible entity and its subsidiaries, with dual enforcement powers: for group-wide risks and for individual entity responsibilities.
• Recommendation 7: Supervisors should have a minimum set of enforcement measures (informative and investigative) and the ability to apply sanctions to mixed activity holding companies (MAHCs) or mixed activity insurance holding companies (MAIHCs) when they fail to provide necessary information.

3. Enhancing Supervisory Capabilities

• Recommendation 8: The Commission should consider binding technical standards for a common reporting scheme on risk concentrations and intra-group transactions, including quantitative limits.
• The ESAs emphasize the need to enhance the use of the supervisory tool kit and to take into account sectoral differences between CRD IV and Solvency II.

Key Entities and Definitions

• IORPs (Institutions for Occupational Retirement Provision): These are not included in FICOD's group-wide supervision due to national differences, but the ESAs recommend that the Commission re-examine their inclusion once the quantitative impact assessment is completed.
• Ancillary Insurance Services Undertakings: These should be included in the insurance sector for consistency with banking sector practices.
• SPEs/SPVs (Special Purpose Entities/Special Purpose Vehicles): These should be included in the perimeter of supervision to capture all relevant financial activities, especially those related to securitization and shadow banking. The consolidation of SPEs/SPVs should be based on risk transfer and economic interconnectedness, not just ownership.

Regulatory Context and Rationale

• The financial crisis highlighted the need for group-wide supervision of financial conglomerates to address risks posed by non-regulated entities.
• The Joint Forum Principles were referenced to ensure international consistency in financial conglomerate supervision.
• The sectoral legislation (Solvency II and CRD IV) is still under negotiation, and the ESAs note that the final versions will influence the application of FICOD.
• The ESAs do not seek to harmonize company law across the EU but emphasize the public interest in prudential supervision over private law relationships.

Conclusion

The ESAs advocate for a more inclusive and consistent supervisory perimeter, enhanced governance and enforcement mechanisms, and greater supervisory empowerment to ensure that financial conglomerates are adequately supervised. They also highlight the importance of aligning regulatory frameworks with accounting and risk structures, and recommend that the Commission revisit the inclusion of IORPs and other entities in the future.