europe 101 | securities regulation
TRANSCRIPT
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EUROPEAN UNION SECURITIES RULEMAKING
June 11, 2015NICSA Webinar Sponsored by ALFI
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Panelists:
Antoine KremerHead of European Affairs, The Luxembourg Bankers’ Association & Association of the Luxembourg Fund Industry
Theresa HamacherPresident, NICSA
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Today’s WebinarAgenda
– Players– Process
Process– Trends in Europe– E.U. vs. U.S.
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European UnionToday
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European Economic AreaToday
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European Steel and Coal Community1950
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European Economic Community1957
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European Economic Community1973
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European Economic Community1981
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European Economic Community1986
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European Community1993 | Maastricht Treaty
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European Community1995
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Eurozone1999
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European Community2004
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European Community2007
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European Union2009 | Lisbon Treaty
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European Union2013 to Today
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European UnionThe Future: Smaller?
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European UnionThe Future: Bigger, Stronger?
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E.U. vs. U.S.
#1 The E.U. is changing more
dramatically
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The PlayersThe European Council
Sets Overall Policy and Priorities
European Commission
European Parliament
Council of the European Union
European Securities & Markets Authority
(ESMA)
Member States
Prepares Legislation Debate & Approve Legislation Implement Legislation
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The Players | The European Council
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• Composed of heads of state or government of all E.U. members states
• Sets overall policy and priorities
Current PresidentDonald Trask (Poland)
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The Players | The European Commission
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• The E.U.’s civil service, divided into Directorates• Must propose all legislation
Current PresidentJean-Claude Juncker (Luxembourg)
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The Players
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
The European CouncilSets Overall Policy and Priorities
European Commission
European Parliament
Council of the European Union
European Securities & Markets Authority
(ESMA)
Member States
Prepares Legislation Debate & Approve Legislation Implement Legislation
www.nicsa.org
The Players | The European Parliament
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• 700+ members popularly elected every 5 years• One of two players that must approve all legislation
Current PresidentMartin Schulz (Germany)
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E.U. vs. U.S.
#2 The E.U. government has more
limited powers than the U.S. Federal government (namely no control over
taxation or defense)
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The Players | The Council of the European Union
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• Also known as the Council of Ministers• Composed of the relevant ministers from the E.U. member
states• The other player that must approve all legislation• Proposals must pass by a qualified majority (representing a
majority of the member states and 65% of E.U. population)• Presidency rotates every 6 months on a predetermined
schedule
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E.U. vs. U.S.
#3 E.U. member states are heavily
involved in securities rulemaking
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The Players
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
The European CouncilSets Overall Policy and Priorities
European Commission
European Parliament
Council of the European Union
European Securities & Markets Authority
(ESMA)
Member States
Prepares Legislation Debate & Approve Legislation Implement Legislation
www.nicsa.org
The Players | ESMA
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• European Securities and Market Authority• Independent authority responsible for safeguarding the
European financial system
Current ChairSteven Maijoor (Netherlands)
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The Players | Member States
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• Implementation of directives adopted at the E.U. level through implementing measures in national law
• Enforcement of directives and regulations
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E.U. vs. U.S.
#4 Eurospeak and American don’t
always align
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The Process
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
Level 4Level 2Level 1
Legislative Acts
Non-Legislative Acts
Binding Technical Standards (BTs)
Level 3
Comply or Explain Enforcement
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The Process | Legislative Acts
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• European Commission proposes legislation– Often launches a consultation process with a green
paper– The Commission may explain its proposal in a white
paper• Legislative acts must be approved by both the European
Parliament or the Council of the European Union• The E.U. has formal and informal mechanisms for reaching
agreement on legislation
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The Process | Non-Legislative Acts and Binding Technical Standards
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• The European Commission may be given authority to follow up on legislation by developing– Delegated acts on technical issues– Implementing acts that ensure uniform adoption
throughout the European Union• Alternatively, ESMA may be given authority to develop
Binding Technical Standards, which must be approved by the European Commission
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The Process | Comply or Explain
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• Member states must make every effort to comply with ESMA guidelines – or they must explain if they do not intend to comply
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The Process | Enforcement
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
• The enforce implementation by member states:– European Court of Justice– Fast track procedure managed by ESMA
• Enforcement against individual parties is handled by member states
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Recap | Players and Process
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
Players• European Council• European Commission• European Parliament• Council of the European
Union• ESMA• Member states
Process• Legislative acts (directives,
regulations)• Non-legislative acts
(delegated, implementing), binding technical standards
• Comply or explain• Enforcement (Court of
Justice, Fast Track, member states)
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Recap | E.U. vs. U.S.
European Commission
European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
1. The E.U. is changing more dramatically2. The E.U. government has more limited powers than the
U.S. Federal government (namely no control over taxation or defense)
3. E.U. member states are heavily involved in securities rulemaking
4. Eurospeak and American don’t always align
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European ParliamentEuropean Securities &
Markets Authority(ESMA)
Member States
Questions ?
Antoine KremerHead of European Affairs, The Luxembourg Bankers’ Association & Association of the Luxembourg Fund Industry
Theresa HamacherPresident, NICSA