EBA欧洲银行-JCFC-09-10_Aviva_7页_121kb

Aviva Comments on Review of FCD Summary

Core Content

Aviva has provided detailed comments on the Review of the Financial Conglomerates Directive (FCD), emphasizing the need for clarity, consistency, and proportionality in the supervisory framework for financial conglomerates. The company agrees with the consultation paper's identification of key uncertainties and inconsistencies in the current FCD implementation, and supports the development of level 3 guidance to address these issues. However, Aviva also highlights the limitations of non-legally binding guidance and advocates for legislative amendments where necessary to ensure regulatory convergence across the EU.

Main Views

General Comment on the Whole Review of FCD

• Agreement: Aviva agrees that the review highlights important uncertainties and inconsistencies in the current FCD implementation.
• Need for Resolution: It is necessary to resolve these areas to ensure a fair playing field and a consistent, proportionate, and risk-based supervisory approach.
• Preference for Level 3 Guidance: Aviva believes that level 3 guidance can address some issues quickly and flexibly.
• Risk of Non-Convergence: There is a risk that non-binding guidance may not lead to regulatory convergence across the EU.
• Encouragement for CEIOPs: Aviva strongly encourages CEIOPs to take an active role in developing and monitoring this guidance.
• Desire for Clarity: The company would welcome more clarity on how conglomerates will be supervised under the new European Supervisory Authority regime.

Chapter 2: Definitions of Holding Companies and Sectoral Group Supervision

• Agreement on Analysis: Aviva agrees with the analysis of the definitions of different types of holding companies and their impact on sectoral group supervision.
• Support for Option 1: Aviva supports option 1, which allows a holding company to be classified as both a mixed financial holding company and an insurance holding company/financial holding company, to retain supervisory powers and avoid anomalies.
• Low Impact Method: The proposed legal change in option 1 is seen as the least impactful way to achieve this.

Chapter 3: Definition of "Financial Sector" and Threshold Conditions

• Agreement on Analysis: Aviva agrees that there is a lack of clarity on how asset management companies (AMCs) should be treated under the FCD.
• Support for Option 2: Aviva supports option 2, which proposes amending the FCD to explicitly include AMCs in the identification process.
• Preference for Legislative Change: Aviva believes that a guidance-based approach does not provide the same level of legal certainty and may conflict with national laws.
• Caveat on Guidance: If guidance is not consistently applied, the legislative approach should be reconsidered.

Chapter 4: Treatment of Participations

• Agreement on Analysis: Aviva agrees with the analysis of the implications of different treatments of participations.
• Support for Options 1A and 1B: Aviva supports both guidance options (1A and 1B) on the "durable link" criterion and the inclusion of participations in threshold tests.
• Support for Legislative Change: Aviva also agrees with the legislative change to allow supervisors to exclude groups with only participations in the smallest sector, provided it is supported by appropriate risk-based guidance.

Chapter 5: Treatment of Participations in Risk Concentrations and Intra-Group Transactions

• Agreement on Analysis: Aviva agrees with the analysis on the treatment of participations in risk concentrations and intra-group transactions.
• Support for Option 1: Aviva supports option 1, which proposes additional level 3 guidance on how participations should be treated in assessing risk concentrations, intra-group transactions, and internal control mechanisms.

Key Issues and Recommendations

• Clarity and Consistency: Aviva emphasizes the need for clarity and consistency in the definition of financial conglomerates and the treatment of AMCs and participations.
• Legal Certainty: The company advocates for legislative amendments where necessary to ensure legal certainty and avoid conflicts with national laws.
• Risk-Based Approach: Aviva supports a risk-based approach in the supervisory regime, especially for small conglomerates.
• Supervisory Powers: It is important to retain supervisory powers and avoid weakening the structure of conglomerates due to their classification.
• Guidance Application: Aviva acknowledges the importance of guidance but cautions that it must be consistently applied across member states to achieve convergence.

Conclusion

Aviva's comments reflect a balanced view, supporting both level 3 guidance and legislative changes where appropriate. The company's main concern is ensuring that the FCD framework remains consistent, proportionate, and effective in supervising financial conglomerates, particularly those with complex structures and significant risk concentrations.