Capital Markets Union: EU Parliament adopts resolution on stocktaking and challenges of EU financial services regulation

The EU Parliament has adopted a non-legislative resolution on stocktaking and challenges of the EU financial services regulation. The Parliament welcomes the Commission's Capital Markets Union (CMU) project and recognises the achievements of financial regulation in responding to the ramifications of the financial crisis. The Parliament believes that overly complex regulation can affect investment negatively and contends that the complexity of regulation must also be addressed regarding its application to non-financial end-users of financial products.

Amongst other things, the resolution calls for:

• the Commission, when reviewing the European Market Infrastructure Regulation (EMIR), to examine the effect that lowering the quality of collateral accepted by central counterparties (CCPs) could have on the resilience of CCPs;
   
• the Commission and supervisors to address the interaction between International Financial Reporting Standards (IFRS) and prudential requirements;
   
• a stronger focus in policy making on the global competitiveness of the EU financial sectors without detriment to financial stability and consumer protections, and underlines that the CMU project must be seen in the context of improving the competitiveness of European business and the EU economy;
   
• the Commission to propose a consistent, practical and transparent framework for procedures on third country equivalence, and for all equivalence decisions to be adopted by means of delegated acts; and
   
• the Commission services to conduct a comprehensive quantitative and qualitative assessment every five years of the cumulative impact of EU financial services regulation on financial markets and its participants at EU and Member State level in order to identify shortcomings and loopholes, to assess the performance, effectiveness and efficiency of the regulation, and to report back to Parliament, with the first of these assessments to be completed by the end of 2016.