European Parliament

European Parliament and ECB Inter-Institutional Agreement on SSM in Force

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On November 7, the European Central Bank (ECB) updated its webpage on building a banking union to reflect the coming into force of the inter-institutional agreement (IIA).  The ECB has agreed with the European Parliament on cooperation on procedures related to the single supervisory mechanism (SSM).  The ECB also published a copy of the IIA, which will also be published in the Official Journal of the EU.

The UK Prime Minister has stated that the UK will not participate in the SSM.  ECB  webpage.  IIA.

European Parliament Adopts Committee on Organized Crime, Corruption and Money Laundering Final Report

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In a press release dated October 23, the European Parliament announced its adoption of the final report of the special committee (CRIM). The European Commission also published a press release welcoming the report.

In addition, the European Parliament published a provisional edition of the text of the adopted resolution (page 333).  The resolution sets out an EU action plan for organized crime, corruption and money laundering in 2014-9.  European Parliament Press Release.  European Commission Press Release.  Text.

European Parliament Will Now Consider MiFID II Legislative Proposals During December Plenary Session

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The European Parliament updated its procedure files on MiFID II legislative proposals further to last week’s update, and will now consider these proposals at its plenary session held on December 9-12.

The MiFID II legislative proposals will replace and recast the Markets in Financial Instruments Directive (2004/39/EC) (MiFID).  Procedure Files.

SSM Legislation Adopted by European Parliament at First Reading

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In a plenary session held on September 12, the European Parliament adopted legislation establishing the single supervisory mechanism (SSM), as announced in a press release.

The new EU bank supervision system will bring approximately 150 of the EU’s largest banks under the European Central Bank’s direct oversight in a year’s time.  The system will be compulsory for Eurozone members and will be open to other EU countries.  Press Release.

Legislative Resolution on the Market Abuse Regulation Adopted at First Reading by European Parliament

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In a press release published on September 10, the European Parliament announced that it had adopted a legislative resolution on the Market Abuse Regulation (MAR) in a plenary session.  The legislative resolution will establish tougher rules to strengthen prevention and punishment of market abuse.

The leading MEP on the legislation, Arlene McCarthy, said “we are sending a clear signal that the EU is not a soft option or safe haven for perpetrators of market abuse.”

The legislation introduced:

  • Tougher sanctions: Individuals convicted of market abuse will face fines of up to €5 million and a temporary or even permanent ban on undertaking certain roles within investment firms, while offending companies could be fined up to 15% of their annual turnover or €15 million.
  • Wider scope: A range of financial instruments, including commodity derivatives affecting food and energy prices, traded inside and outside the exchanges, will now be covered.

The European Parliament is due to start negotiations with EU member states on the criminal sanctions for market abuse (directive) in October.  Press Release.

Council of the EU Announces Political Agreement on the Market Abuse Regulation (MAR)

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On June 26, following long running negotiations, the Council of the EU announced a compromise with the European Parliament on the proposed MAR.

The MAR proposal and the European Commission’s proposed Directive on criminal sanctions for insider dealing and market manipulation (CSMAD) will together revise and replace the current Market Abuse Directive.  Inter alia, the proposals broaden the scope of the regulatory framework to cover new trading exchanges and over-the-counter trading.  Press Release.

European Parliament Adopts at First Reading Proposed Regulations on European Venture Capital Funds and European Social Entrepreneurship Funds

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On March 12, the European Parliament adopted at first reading texts relating to the proposed Regulations on European Venture Capital Funds (EuVECAs) and European Social Entrepreneurship Funds (EuSEFs).

The Regulations are expected to make it easier for venture capitalists to attract more capital for start-up companies across Europe, by establishing a single rule book of requirements which will ensure that venture capitalists are no longer required to meet different standards in each member state.  The Regulations will also lay foundations for “European Social Entrepreneurship Funds”  (ESEFs)  which will allow investors to easily identify funds that are focused on investing in European social businesses.

The European Commission published a press release welcoming the adoption of the texts, stating that the Council is expected to adopt the Regulations on March 21, and that the Regulations will enter into force 20 days after publication in the Official Journal of the EU (OJ), which the Commission expects to be “before the summer”.

EU Agrees to Cap Bankers’ Bonuses

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On February 27, the Council of the EU and the European Parliament announced that they had reached preliminary agreement on the legislative proposals for the CRD IV reforms, including on the key contentious issue of bankers’ bonuses.  Bonus payments to bankers are to be capped at twice their annual salary and banks will be subject to a strict transparency regime.  The basic agreement is a 1:1 ratio on salary relative to variable pay, which can rise to 1:2 in the event of shareholder approval consisting of at least 65% of shareholders owning half the shares represented (or 75% of votes in the event that there is no quorum).  As well as the bonus cap, it was also agreed that banks must reveal their taxes and profits on a country-by-country basis from 2015, assuming that this measure is not judged as being an impediment to inward investment by the European Commission.

Member states will be required to transpose the CRD IV Directive by January 1, 2014, and it is expected that the European Parliament will vote on the provisional agreement, once formally endorsed by the Council, in its plenary session from April 15-18.

European Parliament to Consider Solvency II Amending Directive at Plenary Session

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On 7 June 2012, the European Parliament updated its procedure file on the proposed Directive amending the transposition and application dates for the Solvency II Directive (2009/138/EC). The procedure file indicates that the Parliament will consider the proposed Directive during its plenary session on 3 July 2012. Procedure File.

The European Commission published its legislative proposal for this Directive in May 2012. Legislative Proposal.