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This proposal will cover all financial sectors that operate within the EU under the so-called equivalence regime, a system whereby Brussels grants access to firms outside the EU that comply with rules similar to the rules of the block.
After Brexit, equivalence is seen as the most likely scheme for regulating the activities of British firms in the EU, although the country's financial services sector promotes easier access to the continent's domestic market.
According to the draft legislative proposal, which is available to Reuters, EU leaders will increase their monitoring powers for all foreign financial services that are subject to equivalence decisions.
This will complement previous steps to strengthen inspections of specific activities, such as clearing, which has already enraged Britain.
EU regulators will have to regularly monitor the regimes of external financial regulation and inform the European Commission about possible circumstances that may require a change or a rapid revocation of the equivalence decision.
At the moment, regular checks are expected only for certain financial services industries.
Regulators will monitor "regulatory, supervisory, law enforcement and market changes" in other countries with EU equivalent financial sector norms.
In some cases, EU supervisors can also request "on-site inspections" as part of coordinated monitoring with foreign regulators, the draft document says.
The Paris European Securities and Markets Authority will receive more resources, because it will need to control more foreign regulatory regimes.
So far, the EU has taken decisions that would allow for the provision of equivalence status for various suitable foreign sectors, ranging from credit rating agencies and accounting to investment and insurance companies.
The United States, China, Japan, Canada and South Korea are among the countries that have reached equivalence agreements with the EU for specific financial sectors.
The EC's legislative proposal, which is expected to be published on Wednesday, will require the approval of EU countries and European legislators.
source: reuters.com
After Brexit, equivalence is seen as the most likely scheme for regulating the activities of British firms in the EU, although the country's financial services sector promotes easier access to the continent's domestic market.
According to the draft legislative proposal, which is available to Reuters, EU leaders will increase their monitoring powers for all foreign financial services that are subject to equivalence decisions.
This will complement previous steps to strengthen inspections of specific activities, such as clearing, which has already enraged Britain.
EU regulators will have to regularly monitor the regimes of external financial regulation and inform the European Commission about possible circumstances that may require a change or a rapid revocation of the equivalence decision.
At the moment, regular checks are expected only for certain financial services industries.
Regulators will monitor "regulatory, supervisory, law enforcement and market changes" in other countries with EU equivalent financial sector norms.
In some cases, EU supervisors can also request "on-site inspections" as part of coordinated monitoring with foreign regulators, the draft document says.
The Paris European Securities and Markets Authority will receive more resources, because it will need to control more foreign regulatory regimes.
So far, the EU has taken decisions that would allow for the provision of equivalence status for various suitable foreign sectors, ranging from credit rating agencies and accounting to investment and insurance companies.
The United States, China, Japan, Canada and South Korea are among the countries that have reached equivalence agreements with the EU for specific financial sectors.
The EC's legislative proposal, which is expected to be published on Wednesday, will require the approval of EU countries and European legislators.
source: reuters.com
