The Commission intends to improve the supplementary supervision of financial entities in a financial conglomerate in two steps. In the first step the Commission adopted a proposal for a Directive amending the Directives linked to supplementary supervision, in particular Directives 98/78/EC, 2002/87/EC and 2006/48/EC. This proposal deals with the single most urgent technical issue based on a limited review of the existing Directives and it is the subject of this report. In the second step the Commission intends to start a more fundamental review, in the context of developments regarding supplementary supervision. That review is expected to take place at the end of 2011.
The purpose of the Commission's proposal is to provide a so called "quick fix" for a situation that manifested itself in a more problematic way during the financial crisis, but which has been known for almost a decade. It is useful for supervisors to be able to supervise mixed financial holding companies in a similar way as financial holding companies (banking sector) and insurance holding companies (insurance sector). Although the present Directives do not seem to prohibit Member States to adapt their legislation to exert this power over these mixed financial holding companies, a European coordination is useful in order to make this mandatory. In this light, the proposal should have been part of the full review next year.
The Council has arrived to a common view of their amendments for the existing Directives linked to the supplementary supervision. It should be emphasised that the Council proposes to push back the deadline for implementation to a date not earlier than the implementation deadline for Solvency II. With the expected amendment in Omnibus II on the implementation deadline, this implies a full implementation by Member States not earlier than 1 January 2013. In that case, the time frame of the full review and the implementation of this Directive will collide in time and that again raises questions about the need, use and relevance for this Directive under these conditions. It should be noted, however, that the proposed application date proposed by the Commission (1 July 2011) is far from realistic.
This Report includes the Parliament's amendments to the Commission proposal. The amendments are also correlated with most of the Council amendments.
The main amendments concern the following issues:
a) "Lisbonising" of the Financial Conglomerates Directive;
b) amending Directive 2009/138/EC on Solvency II in a similar way as is proposed for Directive 98/78/EC (Article 3a (new));
c) ensuring that the new European Supervisory Authorities will issue general guidelines regarding the supervision of the financial conglomerates through the Joint Committee;
d) improving the transparency of the supervisory activity on the financial conglomerates, including the list and structure of financial conglomerates which will be published;
e) defining and including mixed financial holding companies in the supplementary supervision;
f) introducing stress testing at the level of each financial conglomerate; and
g) including alternative investment fund managers into the scope.
Next steps:
· Deadline for amendments: 2 Feb 2010
· Consideration of amendments: 28 February 2010
· Voting in ECON committee: March 2011
· Vote in Plenary: June 2011
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