The elections for the European Parliament recently took place across the EU. The new MEPs, particularly the members appointed to the new ECON committee will have a tough act to follow. The outgoing committee negotiated over 60 legislative texts with the Council, often introducing radical amendments to the EC’s proposals and holding their ground to ensure key amendments were adopted in the face of sometimes strong opposition. ECON members participated in hundreds of workshops, hearings, coordinators’ meetings and trilogue negotiations. They introduced something in the region of 35,000 amendments to proposals within their remit.
The outgoing EP will be a hard act to follow – it has radically reshaped the financial services landscape following the financial crisis. Complex legislative texts and intense negotiations resulted in countless late-night meetings and last minute agreements as MEPs took on the difficult task of re-shaping the financial industry. They formulated new prudential rules for banks (CRD IV) and insurers (Solvency II). They launched a regulatory regime for hedge funds, real estate managers and private equity firms (AIFMD). They have agreed rules to curb speculative trading and make financial markets more transparent (MiFID II), a clearing requirement for standardised OTC derivatives (EMIR) and rules to protect retail consumers (PRIIPs).
While many of the texts were anticipated well in advance, some were conceived as a response to the crisis, notably the Banking Union package launched in June 2012, which saw the creation of the Single Supervisory Mechanism and the Single Resolution Mechanism in record time. The EP sign off on the last three important elements of the plan during the last plenary on 15 April – BRRD, the SRM and confirmation of the EU-wide guarantee scheme for deposits under €100,000.
New MEPs will still be faced with a mountain of proposed legislation when they take their seats in July. Many reforms remain to be finalised: anti-money laundering, shadow banking (including MMFs), bank restructuring etc. In parallel, the EP has taken on a significant oversight role in respect of the economic reform process in Member States, which remains critical given the tentative financial recovery throughout the EU.
In our feature article this month we explore the new PRIIPs legislation, which takes forward consumer product disclosure by requiring a common form of key information document for products from by different financial sectors.
We hope you’ll find the articles that follow informative. Staying current on new regulatory developments remains challenging, and despite the EP taking a hiatus for elections, we expect a busy summer ahead on the regulatory front.