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ESBG response: EU Commission consultation on ESAs operations

​​​ESBG response to the European Commission consultation 

on ESAs Operations

ESBG (European Savings and Retail Banking Group)

Rue Marie-Thérèse, 11 - B-1000 Brussels

ESBG Transparency Register ID 8765978796-80

​>> See .pdf version 

May 2017​

     I.               Tasks and powers of the ESAs


A. Optimising existing tasks and powers


1.      Supervisory convergence


1. In general, how do you assess the work carried out by the ESAs so far in promoting a common supervisory culture and fostering supervisory convergence, and how could any weaknesses be addressed? Please elaborate on your response and provide examples.

The three ESAs, and in a broader sense, the ESFS have achieved a much more coherent supervision of the EU financial system. The ESAs have considerably improved the coordination between national supervisory authorities and have contributed to the consistent application of Union law. ESBG is in particular concerned by the increase in non-core activities and own-initiative work of the ESAs, which could jeopardise the timely exercise of level 1 mandates (please see question 5 for more detail).

When it comes to the EBA, in ESBG's opinion, the EBA's work should focus even more on supervisory convergence (e.g. benchmarking), as well as on mediation, and the Single Rule Book rather than operational issues, thus granting the EBA any kind of over-arching supervisory role should be strictly avoided. This should remain within the remit of the ECB.

The main impediment to supervisory convergence is the limited coordination between the EBA and the ECB/SSM and the attempts made by ECB/SSM to establish standards via, for example ECB Guides. The current practice of the ECB/SSM to impose supervisory and regulatory convergence within the Eurozone is threatening to divide the Single Market into “Eurozone" and “rest of EU". One example with far-reaching consequences for the banking sector is the treatment of non-performing loans, where the ECB/SSM has issued a Guide on its own, but where a consistent EU-wide practice would be of utmost importance for the functioning of the Single Market. Other important examples include the ECB guide on fit and proper[1] and the ECB guides for the repurchase of capital instruments.

When it comes to ESMA, the creation of a common supervisory culture can make sense in parts of market infrastructure (please see question 19 below). However, this must not lead to a situation where different situations are treated uniformly without having regard to the particularities of the national markets which are – for good reasons – very different. Therefore, ESBG is concerned that ESMA has occasionally broadly interpreted its mandate and has overstepped its mandate in the past.

ESMA has the task of “technical" implementation of the specifications laid down by the Commission at level 1. However, ESMA is intervening politically in supervisory. At times, attempts are made to overturn the basic decisions prescribed by the European legislator at level 1 (regarding monetary benefits, for example, attempt to introduce a de facto prohibition of fees at level 2; regarding product governance, for example, requiring the distributing body to determine its own target market). Exceeding the powers transferred by level 1 in this way leads to ESMA measures not being sufficiently legitimated. In particular, there is also no (parliamentary) control over the decisions made by ESMA. This is highly dubious in terms of the rule of law.

Until now, in order to promote common practices among countries with different financial backgrounds, we have witnessed increasingly-detailed regulation for level 2 and level 3 texts. Nevertheless, we believe this is time now to reduce the rules to the real risks following the proportionality initiative and leave local regulators to control their proper implementation. In order to be efficient, there is a need for more flexibility. A good example is the regulation on market sounding far too extensive – in particular, the responsibility for the sounder to assess the information without taking into account practices. This needs to be supported by real practitioners able to discuss with the industry without losing independence, and a decision process taking into account regulators involved significantly in the supervision of the market. It probably implies that local regulators, based on the size of the market and their representation in terms of decision making, are strengthened.

The reporting requirements of the ESAs could be streamlined. More cooperation between the ESAs, NCAs and the SRB would facilitate the ESAs' work for supervisory convergence and will reduce the constraints on market participants.

​Finally, in general the Q&As are a good example to foster supervisory convergence across the EU, but in most cases the reaction time to questions raised in Q&As process is too long, and therefore making it difficult for institutions to implement technical solutions needed to comply with the legal texts by a certain deadline (please see more below on this topic). The ESAs could cooperate and join forces to provide timely legal advice. In addition, we consider that Q&As should not create less legal certainty, as their raison d'être is exactly the opposite. Once again ESBG believes that the answers should stick to the framework given by level 1 provisions and may not overturn the basic decisions prescribed by the European legislator at level 1.


2. With respect to each of the following tools and powers at the disposal of the ESAs:

- peer reviews (Article 30 of the ESA Regulations);

- binding mediation and more broadly the settlement of disagreements between competent authorities in cross-border situations or cross-sectorial situations (Articles 19 and 20 of the ESA Regulations)

- supervisory colleges (Article 21 of the ESA Regulations);


To what extent:

a) have these tools and powers been effective for the ESAs to foster supervisory convergence and supervisory cooperation across borders and achieve the objective of having a level playing field in the area of supervision;

The ESAs' mandate to conclusively settle disagreements is an important tool to foster supervisory convergence for all banking groups and to address home-host issues. As mentioned in the 2016 EBA Report on the functioning of supervisory colleges, there is certainly room for improvement in terms of enhancing the coordination between going-concern supervision and resolution. In addition, the limited coordination between the various national designated authorities on macro-prudential policy decisions (e.g. institution-based buffers) is a concern for cross-border EU banking groups.

The EBA's role as an observing participant in supervisory colleges only makes sense in combination with the benchmarking mandate (i.e. supervisory convergence) to ensure consistent supervisory practices in the EU.

Practical experience has shown that the alignment procedures take too long. As a consequence, market participants for all practical purposes are forced to deal with the different supervisory practices in cross-borders situations themselves in order not to risk a breach of regulatory demands.


b) to what extent has a potential lack of an EU interest orientation in the decision making process in the Boards of Supervisors impacted on the ESAs use of these tools and powers?

Please elaborate on questions (a) and (b) and, importantly, explain how any weaknesses could be addressed.


3. To what extent should other tools be available to the ESAs to assess independently supervisory practices with the aim to ensure consistent application of EU law as well as ensuring converging supervisory practices? Please elaborate on your response and provide examples.

For the time being, the focus should be on the increase in the practicability of existing tools. The existing tools seem sufficient in all respects. Instead of granting additional tools to the ESAs, these tools should be used with a “sense of proportion".


4. How do you assess the involvement of the ESAs in cross-border cases? To what extent are the current tools sufficient to deal with these cases? Please elaborate on your response and provide examples.



2.     Non-binding measures: guidelines and recommendations


5. To what extent are the ESAs tasks and powers in relation to guidelines and recommendations sufficiently well formulated to ensure their proper application? If there are weaknesses, how could those be addressed? Please elaborate and provide examples.


The ESAs have visibly expanded their own-initiative activities outside of explicit level 1 mandates by issuing level 3 guidelines and recommendations. Since both the European Parliament and the Council lack scrutiny rights under the ESA Regulations with regard to these activities, they are not sufficiently legitimate from a democratic point of view. One should, therefore, consider establishing such scrutiny mechanisms for level 3 measures (in particular for guidelines).

A good example is the area of product governance. Level 1 is based on the concept that (only) the manufacturer of a finance product defines the target market and that the distributor of the product considers such target market. However, the level 2 text (which is based on ESMA's Final Report) suggests that the distributor has to define another target market. This “gap" between the level 1 and level 2 text leads to legal uncertainty for market participants.

Another example is that while the notion of key function holders does not appear in the CRD IV package, a draft joint EBA-ESMA guidelines published on 28 October 2016 requires the supervisory authorities to assess their suitability, having considerable consequences for those cooperative banks which are also savings banks (EBA/CP/2016/17).

Moreover, the ESAs should refrain from expanding their own initiative activities outside explicit level 1 mandates as they should concentrate on level 2 due to the high workload in order not to jeopardise these crucial activities. The principle of prioritisation should also be adhered to, in order to allow the ESAs to prioritise their work based on level 1 requirements. In some cases, budget cuts have in the past been met with reprioritisation of activities, including the postponement of standards and guidelines until after their mandated delivery dates, while new own-initiative activities have been added at the same time.

Nevertheless in our view, the current tasks and powers in relation to level 3 instruments are sufficient. We suggest to better emphasise their non-binding nature in the future.

We also advocate against approaches to replace existing level 3 instruments with supposedly more binding level 1 or 2 instruments. Such an approach is evident in the Commission's CRR II proposal, e.g. with regard to the proposed EBA mandates in Art. 4 (4) CRR II on the formation of groups of connected clients and in Art. 394 (5) CRR II on shadow banking entities. Replacing established level 3 instruments with new level 1 or 2 instruments seems neither efficient nor necessary.

We are also of the opinion that there is a need for more openness and transparency, therefore the ESAs' activities should be consulted to the maximum extent possible, including those which have no direct binding effect (e.g. recommendations and opinions), because these measures pose a risk of having a de facto binding effect. Also, some sort of appeal process could be envisaged to accommodate for the large impact some of the Q&As may have for the supervised entities. There is a risk that these guidelines, which are developed without any involvement of the EU co-legislators or market participants, might have a de facto binding effect on the industry due to the “comply or explain" procedure and are implemented by many NCAs on national level. There have been some cases where Q&As have led to legal uncertainty amongst market participants. Moreover, the ECB often considers those guidelines as rules needing supervision, reinforcing their binding effect. This tendency of the ESAs to act without prior mandate from the legislator is problematic as the democratic aspect of the process is not fully ensured. Because of the lack of control on the ESAs' processes and decisions, there can also be a risk of inconsistency between level 1 and level 2 or level 3 legislations. Consequently, the governance of the ESAs could be reviewed, in order to ensure adequate supervision of the ESAs when making level 2 or level 3 decisions (please see question 24).

It is also important that a thorough analysis of the cost connected with a specific ESA activity (e.g. guideline) is performed; in order for the industry to be able to submit comments on important and costly proposals early in the process.

The risk is that the ESAs are exceeding their mandate by wanting to issue guidance in the area of retail financial products while the grounds for those guidelines are un-clear, which would entail:

  1. A limitation of democratic proceedings as the ESAs' guidance does not pass through Parliament or Council and a prior impact analysis does not take place;
  2. Due to the lack of democratic control a higher risk of inconsistencies between level 1 and level 2 legislation;
  3. Proportionality issues: It seems that this approach has been acknowledged as problematic by the ESAs themselves as the originally-intended cross-selling guidelines have been dropped due to legal issues (letter of the ESAs to Commissioner Hill as of 26 January 2016). However, ESMA has published guidelines on cross-selling based on MiFID II without evident cooperation with the EBA or EIOPA.

Furthermore, there is still room for improvement with respect to Q&As. Q&As are not regulated by law and the ESAs make use of Q&As to a different extent. In particular, ESMA uses Q&As to a large extent in order to enhance convergence within EU Member States. However in practice ESMA often uses this tool in order to implement policy decisions that should be taken by the European legislator at level 1 and level 2 but which have no place in level 3 measures. Therefore, it should be emphasised in the respective ESA regulations that Q&As are not legally binding.

The publication of Q&As might also benefit from a consultation process in order not to lead in the medium- or long-term to an abandonment of a regulatory classification and to coincidences. The consultation process could decrease the hurdles regarding interpretation and timing – as long as the process is not extended. We are strong believers that the European Commission should take more time at level 1 to ensure the text is clear and precise, rather than leaving the details to be hashed out too much by the ESAs. This would allow the ESAs to better allocate their time and resources as far as level 2 legislation is concerned and also give more time for Q&A consultations.

The table below summarises the adoption processes of level 1, 2 and 3 measures under which mandate. In order to ensure close adherence of final instruments to the legislative intent, several changes to the adoption processes can be proposed:

  • Regarding level 2 rules, RTS must lead to delegated acts by the European commission under Article 290 TFEU. However, the adoption by the Commission of a delegated act is submitted to the control of the European Parliament or the Council, ensuring compliance of those acts with the mandate given to the ESAs by level 1 texts. Considering the fact that such a rule is not applied for ITS while implementing acts define specific and important rules, we would suggest introducing a control of the European Parliament or the Council in order to ensure compliance with level 1 texts as well.
  • Regarding level 3 measures, it is suggested to:
    • Introduce mandatory public consultations for Guidelines and Recommendations (currently, consultations are to be conducted where appropriate).
    • Q&As could be either submitted to public consultation or established in collaboration with industry stakeholders (see question 3).
 Level 1 texts =  legislative act (Article 289 TFEU)Level 2 rules = mandate given by Level 1 text to the Commission to adopt delegated act (Article 290 TFEU) and implementing act (Article 291 TFEU)Level 3 measures = soft law
ESAs today issue  draft RTS,  draft ITS, GL and Q&A Delegated ActsImplementing ActsGL + RecommendationsQ&A
Draft Regulatory Technical Standards (RTS),  as provided by  the 2010 ESAs regulations[2]Mandate given  by Level 1 textParliament and Council may block if RTS exceeds level 1 mandate   
Draft Implementing Technical Standards (ITS), as provided by  the 2010 ESAs regulationsMandate given  by Level 1 text 

Parliament and Council can't block if ITS exceeds level 1 mandate

Proposed change : Parliament and Council could  block if ITS overstep level 1 mandate

Guidelines and recommendations (GL), as provided by  the 2010 ESAs regulations

Mandate given  by Level 1 text



Public consultation (where appropriate) + “comply or explain" procedure


Proposed change: mandatory public consultation

Q&A, no legal basis in the 2010 ESAs regulations    Proposed change: public consultation or involvement of the industry or European commission where relevant




3.     Consumer and investor protection


6. What is your assessment of the current tasks and powers relating to consumer and investor protection provided for in the ESA Regulations and the role played by the ESAs and their Joint Committee in the area of consumer and investor protection? If you have identified shortcomings, please specify with concrete examples how they could be addressed.

ESBG agrees with the point mentioned in the consultation paper that it should be taken into account that consumer protection issues are a shared competence of the EU and Member States and that the limits of the subsidiarity principle must be respected. In our view the current tasks and powers relating to consumer and investor protection provided for in the ESA Regulations are already rather broad. In addition we feel that the ESAs are often overstepping their mandate e.g. when drafting regulatory or implementing technical standards.

Furthermore, when pursuing the legitimate goal of investor protection, ESMA often disregards the particularities of the national financial markets. For example, tightened rules concerning the acceptance of monetary benefits have no practical effects in Member States which already provide for a ban on monetary benefits under national law (as in the Netherlands and the United Kingdom), but conversely they have a substantial impact in countries such as Germany, in which fee-based investment advice represents a core activity of the institutions.

Consumer protection must be considered in the context of the respective regulations. The mandate given to the ESAs is defined in Article 9 of the respective regulations. Its scope is very comprehensive in that it enables the ESAs to take a leading role in promoting transparency, simplicity and fairness in the market for consumer financial products and services. In detail the ESAs have the mandate to coordinate, monitor, adopt guidelines and recommendations, issue warnings, prohibit and restrict financial activities. No further additions are needed hereto.

It should also be noted that consumer and investor protection is deeply rooted in the national legal systems, especially in civil law. The NCAs have a closer understanding of the connections between supervisory and civil law.

It seems necessary to avoid a duplication of supervision between the ESAs: EIOPA could supervise insurance products only, whilst banking products and capital markets products could be supervised respectively by the EBA and ESMA. Regarding mixed products such as banking products with embedded derivatives, the Joint Committee could be in charge of their supervision.

As it is widely known, the regulations pursue further goals alongside consumer protection. Having a single supervisory authority in charge of consumer protection could have some merits as it could guarantee better coordination and encourage more cooperation between the ESAs when needed. However ESMA would not be the right authority to be given such mandate.


7. What are the possible fields of activity, not yet dealt with by ESAs, in which the ESA's involvement could be beneficial for consumer protection? If you identify specific areas, please list them and provide examples.

As per the ESA regulation, the current supervisory powers are sufficient to ensure consistent supervision. However, the ESAs need to focus on how to let the market be competitive by trusting the existing market players and infrastructures. A competitive market is a win-win solution for investors and firms looking to have access to financing through the capital markets. However, the authorities' powers could be extended to non-banks and players in the so-called “grey market" that provide financial services and products.


4.     Enforcement powers – breach of EU law investigations


8. Is there a need to adjust the tasks and powers of the ESAs in order to facilitate their actions as regards breach of Union law by individual entities? For example, changes to the governance structure? Please elaborate and provide specific examples.

There is currently no need to adjust tasks as regards the breach of Union law by individual entities. However, the EBA could take a role in ensuring that competent authorities act in line with Union law and to focus on national requirements that contradict EU law.

Moreover, the ESAs' Q&As process could be made more reliable, first through their governance review (please see question 5), second by adding a time commitment for the ESAs to respond (such as 2 months). For instance, question ID 2013_529 was submitted in November 2013 but the EBA's answer was published in February 2017. Such commitment would help to secure the process of preventing breaches of Union law by individual entities as it would reduce uncertainty.


5.     International aspects of the ESAs' work


9. Should the ESA's role in monitoring and implementation work following an equivalence decision by the Commission be strengthened and if so, how? For example, should the ESAs be empowered to monitor regulatory, supervisory and market developments in third countries and/or to monitor supervisory co-operation involving EU NCAs and third country counterparts? Please elaborate and provide examples.

The ESAs should monitor regulatory, supervisory and market developments in third countries in cases where “equivalence" is a crucial variable for the application of guidelines and technical standards and the scope of these exceed the scope of the Commission's equivalence decisions. But any demand for gaining new or advanced competences, as this paragraph proposes by the monitoring of regulatory and supervisory developments, we see the need for fulfilling particular preconditions. First we highlight the need for strong coordination among the ESAs in order to ensure clearly defined responsibilities in any area concerned by such an initiative. Any overlap needs to be avoided.

The goal especially for this initiative should be a comprehensive, single point of information bundled at one European authority and not piecemeal of different assessments by different competent authorities.

Preferably only one competent authority per industry, legislative text and/or field of law should be entitled for a certain task, e.g. to perform third country assessments in terms of supervisory and regulatory levels as proposed with the actual paper. This would mean that anytime a third country assessment is required, e.g. as a result of a new/adapted regulatory requirement (issued by any authority), the responsibility shall only be directed to this specific supervisory authority. We acknowledge that for certain cases it could be difficult to disseminate which institution should make an assessment due to overlaps of different industries, but apart from the general objective to reduce these overlaps, for these cases it needs to be safeguarded that only one competent authority issues an assessment.

Furthermore, the process of assessment and monitoring needs to be both transparent and predictable in the way that the selected responsible authority issues its results, conclusions and/or concrete instructions that are legally binding for all other authorities and institutions, sufficiently justified and easy to track, in order for the industry, without considerable efforts and expenses, to be compliant with new conditions. The process should be understood and provided as a supplementary service to other supervisory authorities and all institutions in order to ensure a harmonised approach in any terms and to all supervisory levels.

Monitoring equivalence decisions should ensure that not only the regulatory framework is equivalent but that it is also “put into practice". The current practice of equivalence decisions is often lacking such an effective monitoring process (“once equivalent, always equivalent").

More precisely, pooling equivalence checks for third country matters at ESMA should be considered, since:

  • Establishing whether financial institutions of a third country have comparable standards on their financial market to those in the European Union, could logically be undertaken uniformly.
  • In this way, financial institutions from third countries receive market access to the EU if they comply with the EU regulations or have an equivalent level of protection in relation to financial products.
  • At present, there is no uniform third country regime. Rather, the configuration differs according to the underlying legal act. The European Commission is therefore competent on a case-by-case basis alongside the national and European (supervisory) authorities and can decide for example by means of an equivalence decision; at times, a combination of different decisions is also necessary.
  • Pooling of equivalence checks in one authority (e.g. ESMA) therefore makes sense.


6.     Access to data


10. To what extent do you think the ESAs powers to access information have enabled them to effectively and efficiently deliver on their mandates? Please elaborate and provide examples.

The ESAs efficiently access information via NCAs. However, they do not sufficiently build on existing data and approach resolution, supervisory and macro authorities in order to gather further information. If the ESAs used the data collected by NCAs there is normally no need to approach institutions for additional data sets. As an overall principle, full cross-institutional data sharing should be implemented. This would also allow for reporting and data collection to progress towards the objective of “report data only once".


11. Are there areas where the ESAs should be granted additional powers to require information from market participants? Please elaborate on what areas could usefully benefit from such new powers and explain what would be the advantages and disadvantages.

As mentioned above, it is important to avoid a duplication of data collection. Existing data need to be tapped first and shared among relevant national and EU authorities. We do not see a need to grant additional powers as this would only exacerbate the existing redundancies in data collection.

We agree with the outlined findings under point 6 'Access to Data' namely the comparability of data and their reliability. Nevertheless we would like to point out that other supervisory authorities, e.g. the ECB detected similar problems, and therefore started initiatives to improve this situation by substantially increasing the data quality. We would highly appreciate that the ESAs consider ongoing initiatives (for example to BIRD and ERF) which aim for the same (or at least similar) outcome and assessing the potential for an overall solution before creating new regulation. Even if initiatives by other authorities do not cover the overall needs, it should become a general approach to include all authorities before starting a new project. The approach would be important in terms of saving precious resources, human capacities as well as financial investments, for both supervisory authorities and affected institutions.

If this initiative's concept focuses, as indicated in the consultation paper under point 7, on “eliminating […] overlaps and inconsistencies" and “making regulatory reporting more efficient [and] less burdensome", we would appreciate the approach of a comprehensive network of data hubs. By combining these hubs with the approach of a common framework of data definitions as intended by ECB's BIRD and ERF, it would be an efficient solution for the ESAs' data inadequacy and the institution's need for a less burdensome regulation, as well as ensuring consistency regarding formats and standard forms.

We therefore disagree with the approach to generally empower the ESAs and enable a direct data access at institutional level. The EU principle of subsidiarity needs to be respected and safeguarded in all legislative initiatives.


7.     Powers in relation to reporting: Streamlining requirements and improving the framework for reporting requirements


12. To what extent would entrusting the ESAs with a coordination role on reporting, including periodic reviews of reporting requirements, lead to reducing and streamlining of reporting requirements? Please elaborate your response and provide examples.

On the different levels of reporting, the ESAs can play an important role in reducing reporting requirements by streamlining the processes and creating efficiencies for those who need to report and more effective information for the users of the reports. There are three lines of reporting and each one addresses different needs:

  • Financial reporting: Financial reporting under IFRS should be applied as issued by the IASB and endorsed in the EU. Any attempt to streamline the reporting process, including periodic reviews of reporting requirements, would impair the global and principles-based character of the IFRS. Streamlining the reporting process is often unhelpful in that it may narrowly address an issue, resulting essentially in rules and exceptions being introduced.
  • Prudential reporting: (i) Under prudential reporting and based on the previous experience of EIOPA and the EBA, it seems that the ESAs could potentially play a more active role in the coordination of reporting and eventually lead to more streamlined processes by developing an IT framework so that all banks report under the same format and put in place a central database to facilitate collection of information and exchanges under the prudential framework. (ii) Furthermore, ESMA could potentially play a more active role during the endorsement advice of a new IFRS. Given the significant interaction between accounting and prudential reporting and the fact that for an IFRS standard to be endorsed in the EU, it must be conducive to the European public good, the impact on regulatory capital under prudential reporting should also be considered during the endorsement process.
  • Non-financial reporting: an area where the ESAs can play a more active role is in non-financial reporting (BIRD, ERF and AnaCredit). Given that such initiatives are currently in their early stages of development, there is a significant potential for increased efficiencies, should the appropriate reporting requirements be streamlined.

Such a power could help to reduce overlaps and ensure the use of the existing, comprehensive data set for different purposes by all authorities involved. Streamlining reporting requirements to supervisory and resolution authorities at micro and macro levels, both in banking and market areas, would be a great step and fit into the existing mandate of the ESAs. However, earlier involvement and ex-ante consultation of the Stakeholder Groups would be required if the ESAs, and the EBA in particular, have an additional role in the reporting framework.

ESBG believes it would be beneficial for the ESAs to decrease existing overlaps by the proposed data hubs, especially with regards to reporting requirements. However, as there are already initiatives in progress – even in the process of being finalised – these should be recognised before establishing new structures.

It should be also appointed that credit institutions in the Eurozone are facing another overlap that is becoming more material and could be avoided or substantially diminished if current regulations would be exercised (see Art 34 of Regulation [EU] No. 806/2014). Therefore ESBG is in favour of having a more integrated approach between all supervisory authorities. In this context it might be consistent to nominate one of the ESAs to set up and organise such an approach.

The introduction of periodic reviews of reporting requirements could be beneficial to credit institutions as they would be better enabled to prepare for future updates. The frequency of such reviews should be sufficiently long so as to avoid constant changes to FINREP (we suggest a minimum period of 3 years between reviews). Deviations from this frequency should be limited to duly justified cases such as the current introduction of IFRS 9.

With regard to the EBA reporting standards, there have been delays by up to 23 months in the adoption of ITSs by the Commission. These delays often lead to parallel reporting regimes and increase uncertainty among institutions and their service providers. Therefore, the current adoption process should be accelerated without compromising on the scrutiny of the Parliament and Council.

We further would suggest evaluating what initiatives are currently ongoing and focus on the same or at least similar objectives (see for example The Cubes in Austria which is an ongoing project by the Austrian National Bank).


13. In which particular areas of reporting, benchmarking and disclosure, would there be useful scope for limiting implementing acts to main lines and to cover smaller details by guidelines and recommendations? Please elaborate and provide concrete examples.

Please see the response to question 12. ESBG currently opposes any initiative that would add to the workload of the ESAs. The European Commission should ensure that the level 1 texts are clear and precise, rather than leaving the details to be hashed out by the ESAs.


8.     Financial reporting


14. What improvements to the current organisation and operation of the various bodies do you see would contribute to enhance enforcement and supervisory convergence in the financial reporting area? How can synergies between the enforcement of accounting and audit standards be strengthened? Please elaborate.

The way the question is structured leads to a presumption that improvements to the current organisation and operation of various bodies responsible to enhance enforcement and supervisory convergence are indeed needed. On the assumption that improvements are needed, the strengthening of convergence activities is by no means the only solution.

The fact that convergence is limited at the moment does not necessarily imply that the current system of NCAs carrying out enforcement activities is not working. Even if accepting that the current supervisory and enforcement status does not work in some jurisdictions, this should not automatically lead to someone to withdraw enforcement and supervisory powers from all NCAs.

An area for improvement relates to the current status where banks acting as subsidiaries of various EU-based banking groups have to adopt two different accounting and financial reporting frameworks, one for group reporting purposes and another for local reporting purposes. This approach creates inefficiencies on the business decisions on a local and group level and increased operational risks and costs. In this respect, we see some room for improvement to the current organisation and operation of ESMA in strengthening the coordination role with local regulators to harmonise their standard of enforcement. ESMA already offers national enforcers the opportunity to discuss relevant topics and decisions within the Europeans Enforcers Coordination Sessions (EECS). The EECS could act as a platform in reaching further convergence on financial reporting enforcement. Furthermore, there is also room for strengthening the powers of ESMA to launch a breach of EU law case concerning substantive financial reporting requirement set in the accounting standards adopted under the IAS Regulation.

It is unclear from the consultation paper, what are the specific synergies the EC is proposing. Furthermore, no direct correlation seems to exist between the factors and processes driving the enforcement of accounting and auditing standards.

Regarding the strengthening of the central audit supervisory powers, no pan-European agency should be established in the field of audit regulation and supervision, as concluded recently after a long debate between the EC, Member States and the European Parliament. It should remain a national responsibility. There are several options to participate in the regulation of auditors and audit firms.

To conclude, we believe that the agreed-upon structures need to be given time to see whether they are working as expected or whether changes are required. And certainly, strengthening central supervisory powers is not the only alternative.

In relation to the publication of the forthcoming insurance contracts standard (IFRS 17) ESBG would like to highlight the major challenge that the standard represents for large parts of the insurance industry. In this sense, we would support EIOPA to become responsible for the supervision of its implementation, being the most appropriate authority to deal with such a complex and technical standard.


15. How can the current endorsement process be made more effective and efficient? To what extent should ESMA's role be strengthened? Please elaborate.


The current endorsement process appears to be working efficiently and effectively and in any case, has not been given sufficient time.

  • Firstly, the Commission's comprehensive review of the functioning of the IAS Regulation (including the endorsement process) was completed less than 2 years ago.
  • Secondly, the Maystadt report of October 2013 has formulated suggestions on how EFRAG's setup and processes should be enhanced, with the majority of proposals being picked up. Based on our experience as members of EFRAG, the majority of these changes have been implemented and, based on recent EFRAG performance appraisals, are deemed to work satisfactorily, with appropriate improvement actions being implemented.

We would also like to note that although Mr. Maystadt originally envisaged the ESAs to become full members of the EFRAG Board with voting rights, they declined to join the organisation and have instead accepted an observer status.

To conclude, more time and evidence is needed to suggest changes, if any. Furthermore, we fail to see where the private end of the endorsement process could be enhanced further without negating or duplicating the work that has already been carried out and finished recently.

The IASB is currently influenced effectively during the IASB consultation process. The objective of public good and its components should be considered during the IASB consultation process and evaluation. In this respect, EFRAG has been very efficient in enhancing Europe's influence. Evaluation of the impact should then focus on whether the IASB has followed the due process and whether Europe's voice was heard.

The rules-based nature of IFRS should be maintained: ESBG is of the view that any additional jurisdictional guidance would impair the global and principles-based character of IFRS. Any additional guidance, in the form of guidelines or interpretations provided on a local or regional level, could impair comparability and transparency.

To conclude, any issues with standards, from ESMA or national enforcers, should be reported to the IASB and IFRS IC for consideration at a global level.

Areas for improvement:

                 (i)     Endorsement process

An area of potential improvement is the time required between EFRAG's endorsement advice and the legal enforcement from the Commission, both for small and big standards. It might be feasible that some of the technicalities that take place after EFRAG's final endorsement advice could be pulled forward (such as the translations of the pronouncements, the sounding of Member States and – potentially – the European Parliament and others). Such a speedier process will reduce uncertainty as to the timing, scope and content to those that have to apply the relevant pronouncements.

               (ii)     Accounting and Prudential Reporting

Although the objectives of financial reporting and prudential regulation are different, there is significant interaction between accounting and prudential reporting, as the accounting figures usually form the basis for calculating regulatory capital and regulatory risk positions.

As a key criterion for an IFRS standard to be endorsed in the EU is to be conducive to the European public good, the effect on capital and prudential ratios as a result of the adoption of a new IFRS should also be considered. At the current endorsement process, EFRAG is not considering the effect of IFRS on capital or prudential ratios of regulated entities given that it is not in the competence of EFRAG to respond to the capital consequences of the new accounting standards.

On the basis of the above, a review mechanism could be implemented that would ensure a systematic and timely review of the prudential framework whenever a material change to accounting is being introduced.

To conclude, the impact of new accounting changes on prudential capital should be investigated to ensure that the envisaged changes to the prudential framework or transitional arrangements take effect simultaneously with the effective date of the revised accounting standard.

B. New powers for specific prudential tasks in relation to insurers and banks


1.      Approval of internal models under Solvency II


16. What would be the advantages and disadvantages of granting EIOPA powers to approve and monitor internal models of cross-border groups? Please elaborate on your views, with evidence if possible.


2.     Mitigating disagreements regarding own funds requirements for banks


17. To what extent could the EBA's powers be extended to address problems that come up in cases of disagreement? Should prior consultation of the EBA be mandatory for all new types of capital instruments? Should competent authorities be required to take the EBA's concerns into account? What would be the advantages and disadvantages? Please elaborate and provide examples.

ESBG is strongly opposed to an extension of the EBA's role in operative supervision. Consulting the EBA for new types of capital instruments would create a doubling of efforts since competent authorities (national and/or Euro area) already fulfil this task. Furthermore, we believe that it would unnecessarily extend the approval process and hence extend even further the duration of supervisory procedures. It would add additional complexity instead of a simplification and exceed the capacities available.

We do not believe there is evidence that competent authorities (national and/or Euro area) lack the ability to ensure the conformity of new instruments with the requirements set out by the capital requirement regulation. Rare circumstances where this is not the case should not be taken as due factor for an elaborate double effort.

Other aspects that should be recognised are market forces, which would instantly react on falsely classified own funds instruments, and auditors that already provide a qualified and standardised evaluation process.


3.     General question on prudential tasks and powers in relation to insurers and banks


18. Are there any further areas were you would see merits in complementing the current tasks and powers of the ESAs in the areas of banking or insurance? Please elaborate and provide examples.

It could envisaged to extend the powers of the ESAs to non-banks and players in the grey market that provides financial services and products, in order to set the same rules and level playing field for all players.

C. Direct supervisory powers in certain segments of capital markets


19. In what areas of financial services should an extension of ESMA's direct supervisory powers be considered in order to reap the full benefits of a CMU? Please elaborate on your response by providing specific examples.

An extension of ESMA's competences as consumer protector and supervisor of good conduct is not favoured by ESBG.

In addition, the transfer of supervisory powers to ESMA for small and medium sized institutions would not be appropriate as they are currently subjected to national supervisory authorities. The NCAs are the competent supervisory authorities for small and medium sized financial institutions. They have a sound knowledge of the particularities of the respective national financial markets and, therefore, have the necessary supervisory expertise. ESMA has no practical supervisory experience in relation to banks. A transfer of direct supervisory powers to ESMA for small and medium sized institutions would also go against the subsidiarity principle. This is because a single European banking supervisor would be more efficient for systemically relevant institutions – which come under the supervision of the ECB.

ESMA has the task of “technical" implementation of the specifications laid down by the Commission at level 1. However, ESMA is leaving these narrow confines ever more frequently and is itself intervening politically in supervisory law. At times, the attempt is made to overturn the basic decisions prescribed by the European legislator at level 1 (regarding monetary benefits, for example, attempt to introduce a de facto prohibition of fees at level II; regarding product governance, for example, requirement for the distributing body to determine its own target market). Exceeding the powers transferred by level 1 in this way leads to ESMA measures not being sufficiently legitimised. In particular, there is also no (parliamentary) control over the decisions issued by ESMA. This would contradict the rule of law.

A concentration of competence at ESMA in subsectors of market infrastructure regulation may make sense against the background of the increasingly international interlinking of markets and trading infrastructures, as the regulatory approach of creating a single level playing field seems logical.

One example of this is the pooling of trading data for the whole of Europe in a common database at ESMA (the Financial Instruments Reference Data System or FIRDS), which serves as an important source to monitor the regulatory obligations of European market participants.

In addition the supervision of post trading market infrastructures such as CCPs should be centralised by ESMA. The current regime is fragmented and inefficient. NCAs would be disburdened and the know-how could be effectively bundled. However, in this respect attention should be paid to the fact that, in the event of such “communitarisation" of central counterparties supervision, the liability risk for a default of such central counterparties must not remain at national level. On the contrary, in this case a corresponding European safety mechanism would have to be established.


20. For each of the areas referred to in response to the previous question, what are the possible advantages and disadvantages? Please elaborate on your response by providing specific examples.


21. For each of the areas referred to in response to question 19, to what extent would you suggest an extension to all entities or instruments in a sector or only to certain types or categories? Please elaborate on your response by providing specific examples.



 II.               Governance of the ESAs


A.   Assessing the effectiveness of the ESAs governance


22. To what extent do you consider that the current governance set-up in terms of composition of the Board of Supervisors and the Management Board, and the role of the Chairperson have allowed the ESAs to effectively fulfil their mandates? If you have identified shortcomings in specific areas please elaborate and specify how these could be mitigated.

The area of governance has become more complicated due to the 'in and out' countries, and majorities systems are difficult to manage. This issue is particularly problematic when the ESAs have to agree as majorities are not the same. Any proposal to streamline the decision making process would be welcomed (more independence either in the form of independent Members of the Board or an independent body would be progress).

Furthermore, when it comes to votes in the Board of Supervisors of ESMA the impact on the financial markets should be taken more into consideration. This should also be reflected in the weight of the votes in the Board of Supervisors of ESMA.

Some seats allocated to European Commission members or national governments could help in reinforcing the coordination between the three levels of the European legal framework.


23. To what extent do you think the current tasks and powers of the Management Board are appropriate and sufficient? What improvements could be made to ensure that the ESAs operate more effectively? Please elaborate.

We believe that the Management Board could be more accountable to solve and properly disclose cases of misconduct, as well as other issues raised by national regulators to ensure they are properly addressed and solved. This is crucial for the credibility of the ESAs as well as to ensure a level playing field.


24. To what extent would the introduction of permanent members to the ESAs' Boards further improve the work of the Boards? What would be the advantages or disadvantages of introducing such a change to the current governance set-up? Please elaborate.

As mentioned in question 5, the ESAs have at times overstepped their mandate. The Board of Supervisors and the Management Board of the ESAs could be reviewed in order to facilitate their role in ensuring supervisory convergence throughout the EU and implement more control over ESAs' work on level 2 or level 3 texts. In particular, closer coordination between the European Commission and ESAs would be appreciated, or give more controlling powers to the Board of Supervisors – by allocating a seat to the three EU institutions.


25. To what extent do you think would there be merit in strengthening the role and mandate of the Chairperson? Please explain in what areas and how the role of the Chairperson would have to evolve to enable them to work more effectively? For example, should the Chairperson be delegated powers to make certain decisions without having them subsequently approved by the Board of Supervisors in the context of work carried out in the ESAs Joint Committee? Or should the nomination procedure change? What would be the advantages or disadvantages? Please elaborate.



B.   Stakeholder groups


26. To what extent are the provisions in the ESA Regulations appropriate for stakeholder groups to be effective? How could the current practices and provisions be improved to address any weaknesses? Please elaborate and provide concrete examples.

Stakeholder groups have only a limited impact due to the diversity of the composition, in particular in the EBA. The role of the stakeholder groups should be strengthened if they were to change the strict composition requirements. The setup of the BSG should be reconsidered, in particular by increasing the number of members representing the banking industry.

With regard to the composition of the ESMA stakeholder group, decentralised banking groups such as savings and cooperative banks should be allocated seats as is the case for the EBA stakeholder group, where 3 of the 10 members representing financial institutions must come from savings and cooperative banks. The ESMA stakeholder group only specifies 10 members from financial institutions.

We propose that stakeholders have more of a say at all relevant levels of the ESAs' drafting and decision-making processes:


  1. At working level, i.e. in working committees/standing committees, the role of consultative working groups should be enhanced and changed. Having more ad hoc working groups (or even permanent working groups) would enable to provide common input on the more technical aspects of the ESAs' work. It would also give the possibility to the stakeholders to express their point of view separately.
  2. An intermediate stakeholder committee could be created including some members of consultative working groups.
  1. Some stakeholder representatives could be nominated as observers to participate in the ESAs' boards.


The restrictive rules on access to information should also be relaxed in order to allow a greater flow of information between the ESAs and the stakeholders and open up the opportunity for stakeholder groups to invite industry representatives to give input and take part in the discussion. The dialogue with all relevant stakeholders should be improved. A crucial element contributing to good governance would be the effective and continuous dialogue with stakeholders when introducing new regulation. Currently, only several market representatives are involved in dialogues with the ESAs via the stakeholder groups. We therefore propose to introduce a culture of permanent dialogue between the ESAs and all relevant stakeholders. More transparency of the work and processes of the stakeholder groups should also be encouraged.

If the ESAs intend to come up with their own-initiative guidelines or recommendations based on the ESAs regulations and with no mandate specified in the regulatory framework, the stakeholder groups should have the power to reject based on a duly reasoned decision.

There is still room for improvement as regards the inclusion of market participants into the legislative process of ESMA. Currently, ESMA includes market participants only at the end of the legislative process. They are often confronted with the “finished product" only after the event. The result of this is that once ESMA has adopted a course, corrections can no longer be made at all or only in part (e.g. monetary benefits under MiFID II: it is true that it was possible to prevent a de facto prohibition of fees at the last minute, but large parts of the regulations on monetary benefits are still inconsistent and unclear).


III.               Adapting the supervisory architecture to challenges in the market place


27. To what extent has the current model of sector supervision and separate seats for each of the ESAs been efficient and effective? Please elaborate and provide examples.

Connecting the EBA and EIOPA into a hybrid twin peaks model could be one way forward if it would free up resources for IT, economic analysis and impact assessments. In this regard, a consolidation of the current model of sector supervision would be welcomed if it could lead to an extensive cost reduction. However, due to the existing split of competences between European and national authorities it has to be seen as a whole. In recent years supervisory costs have increased significantly.

Independently of the structure, the review should be driven by possible efficiency enhancements and address unnecessary overlaps such as duplications of tasks and powers.


28. Would there be merit in maximising synergies (both from an efficiency and effectiveness perspective) between the EBA and EIOPA while possibly consolidating certain consumer protection powers within ESMA in addition to the ESMA's current responsibilities? Or should EBA and EIOPA remain as standalone authorities?

Connecting the EBA and EIOPA could make sense in order to profit from synergies. However, ESBG is of the opinion that consumer protection should not be allocated to ESMA (please see our explanations under question 6). The review should be driven by possible efficiency enhancements and address unnecessary overlaps such as duplications of tasks and powers.


IV.               Funding of the ESAs


29. The current ESAs funding arrangement is based on public contributions:

a) should they be changed to a system fully funded by the industry;

b) should they be changed to a system partly funded by industry?

Please elaborate on each of (a) and (b) and indicate the advantages and disadvantages of each option.

  1. No.
  2. No.

With regard to the work (to date) of the ESAs in converging and aligning micro-prudential oversight at EU level, there is a necessary public good involved in oversight by public authorities and ESBG believes it important that the European Union budget continues to support the agencies that fall under the responsibility of the EU institutions. In addition, annual budgetary controls by the European parliament remain essential to ensure budget discipline and to avoid unnecessary spending.

Europe's savings and locally-focused retail banks are of the opinion that the cost of regulation should not be borne by financial institutions. The banking industry already contributes heavily to regulation and supervision (e.g., SSM costs 2017: € 464.7mn, SRB contributions 2017: € 90.7mn), and additional EU contributions would further increase the disproportionate impact on savings and retail banks. It is currently the general practice that three quarters of agencies are fully- or mostly-funded by the EU budget, therefore the change would bring about discrimination against actors in other sectors. Effective supervision is not only in the interest of financial institutions, but of the whole economy in financial stability.

By being partly financed by the European budget, it is also guaranteed that national interests do not overstep the commitment to European interests, in particular to the development of a Single Rule Book as a cornerstone to the single market. In addition, unlike the SSM and the ECB, the absence of direct supervision from the ESAs on EU banks cannot justify a contribution from the industry.

National funding models in the areas of regulation and supervision differ widely across countries. While some national supervisory authorities are operating under fee-based models, others are funded by national or central bank budgets. Therefore banks are already affected differently by supervision costs depending on the country they are based in. Introducing additional ESAs fees would only exacerbate the existing distortions and should not be considered.

The currently-exercised influence by the European Commission, the European Parliament and the European Council on the ESAs' budgets beneficial to budgetary discipline and we fear that a transition to a fee-based financing could increase the ESAs budgets significantly.

The ESA's responsibilities are overwhelmingly of a regulatory nature. While, for example, the European Central Bank's fee-based funding model within the Single Supervisory Mechanism may be justified by the direct relation between supervision costs and an entity's size and riskiness, such a relation is absent in the ESAs' case.

In working on regulatory technical standards or implementing technical standards the ESAs are, in fact, performing tasks that should normally be performed by the European Commission pursuant to Articles 290 and 291 of the TFEU, therefore a significant part of the costs of the ESAs should be covered by the Commission's/EU budget.

Last but not least the current environment of low – and even negative – interest rates makes for a particularly unfavourable moment to introduce additional fees and levies to an industry where margins and profitability are under substantial pressure.

Therefore ESBG is strongly in favour of maintaining the current system of funding. We propose moving towards an independent budget line within the EU budget, not combined with the European Commission's budget which would limit the impact of its variations on the ESAs funding.


30. In your view, in case the funding would be at least partly shifted to industry contributions, what would be the most efficient system for allocating the costs of the ESA's activities:

a) a contribution which reflects the size of each Member State's financial industry (i.e., a "Member State key"); or

b) a contribution that is based on the size/importance of each sector and of the entities operating within each sector (i.e., an "entity-based key")?


Please elaborate on (a) and (b) and specify the advantages and disadvantages involved with each option, indicating also what would be the relevant parameters under each option (e.g., total market capitalisation, market share in a given sector, total assets, gross income from transactions etc.) to establish the importance/size of the contribution.

As stated before, we are not in favour of the introduction of industry contributions.


31. Currently, many NCAs already collect fees from financial institutions and market participants; to what extent could a European system lever on that structure? What would be the advantages and disadvantages of doing so? Please elaborate.

As stated before, the collection of fees differs widely from one Member State to another and this cannot be harmonised at European level without exacerbating the already existing distortions of competition.


General question


32. You are invited to make additional comments on the ESAs Regulation if you consider that some areas have not been covered above. Please include examples and evidence where possible.

As we see the importance of this initiative in terms of a general discussion the outcome should focus on a more balanced and integrated system of all contributing supervisory authorities across the EU. We highlight the need for a general adaptation of competences and work processes. Overlaps in reporting requirements or conflicting conclusions need to be avoided. New initiatives should be cross-checked and evaluated before initiated to avoid doubling effects in work load and unnecessary legal and “structural" conflicts.

In light of this, the Capital Markets Union should also be used to assess the cooperation between the European Supervisory Authorities and to improve it. The early consideration of interactions with (and impact on) other areas of regulations as well as exchanges with other standard setters is necessary, in ESBG's view, to avoid different rules for similar situations.

With regards to drafting the standards, the current timeframes given to the ESAs under level 1 texts are too short. This issue could be solved by level 1 giving a mandate for a period of drafting level 2, and not an absolute date. This would also allow the ESAs extra time to consult interested stakeholders. Delays in the European rule making process should not lead to shortened implementation periods for financial institutions. Instead, one should take a “dynamic" approach according to which an implementation at national level is only necessary after a certain amount of time (e.g. 12 or 15 months from the publication of the European text in the Official Journal) has elapsed. 

As the implementation is crucial, the dates for application of EU directives and regulations should be set not by reference to absolute dates but by referring to a period beginning from the date of publication of ESAs implementing rules (this would avoid situations such as MiFID and EMIR margin rules).

Another tool which could be extremely useful when the implementation period appears to be insufficient, the European Commission should consider the possibility of adopting non-action letters when it is manifested that financial institutions will not be able to comply with rules on the day of application. A recent example is the EMIR variation margin exchange requirement where the ESAs had to publish an ambiguous statement inviting national competent authorities to show understanding in the enforcement of a rule while highlighting that they legally cannot allow for the postponement of the enforcement.

ESBG would also like to point out the current lack of an appeal process especially in relation to the ESAs' binding technical standards. This raises concerns in terms of a democratic and judicial review. Therefore, we believe that any review of the ESAs' framework introduces the right to an appeal process to the European Court of Justice – in particular for all binding regulations provided by the ESAs.

From an organisational perspective, supporting documents, presentations and feedback statements/summaries should be available after the hearings as they constitute very useful material to work with.

While some of the ESAs' BoS and BSG meeting minutes are published on the ESAs' websites, there is usually a significant time lag between meeting and publication of more than 3 months. We therefore suggest to make minutes available within 4-6 weeks after each meeting and to enhance the content of published minutes, i.e. with regard to the reasoning behind individual decisions.

ESBG members would appreciate if the ESAs' final texts are published in the EU's official languages simultaneously or at least very soon after publication of the English versions.[3]

Lastly the ESA regulations should provide for the necessity of a “cost-benefit-ratio", i.e. the ESAs should be required to consider costs and benefit with regard to all measures taken by them.


About ESBG (European Savings and Retail Banking Group)


ESBG – The Voice of Savings and Retail Banking in Europe

ESBG brings together nearly 1000 savings and retail banks in 20 European countries that believe in a common identity for European policies. ESBG members represent one of the largest European retail banking networks, comprising one-third of the retail banking market in Europe, with 190 million customers, more than 60,000 outlets, total assets of €7.1 trillion, non-bank deposits of €3.5 trillion, and non-bank loans of €3.7 trillion. ESBG members come together to agree on and promote common positions on relevant regulatory or supervisory matters.


European Savings and Retail Banking Group – aisbl

Rue Marie-Thérèse, 11 ■ B-1000 Brussels ■ Tel: +32 2 211 11 11 ■ Fax : +32 2 211 11 99

Info@wsbi-esbg.org ■ www.wsbi-esbg.org


Published by ESBG. May 2017.

>> See .pdf version

[1] In this current example, the ECB is publishing its Fit and Proper Guide while the relevant EBA Guidelines are still under discussion, which means that the ECB cannot take into account the final EBA Guidelines.

[2] ESAs regulations include:

·         Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority) amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC

·         Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority) amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC

·         Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority) amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC

[3] For example, the English version of EBA Guidelines No 2015/20 (Limits to Exposures of Shadow Banking Entities) was published December 14, 2015, while the translated versions were published June 3, 2016. This in effect reduced the time available for preparation and compliance by half a year, as the Guidelines came into effect January 1, 2017.

European Supervisory Authorities (EBA-ESMA)