14 May 2012

EBA: Joint Consultation Paper / Response to the EC’s Call for Advice on the Fundamental Review of the FICOD

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA) is launching a three-month public consultation on the proposed response to the call for technical advice from the European Commission on the fundamental review of the Financial Conglomerates Directive ("the FICOD").

The Joint Committee of the European Supervisory Authorities received a Call for technical advice from the European Commission (EC) to assist the European Commission in its fundamental review of the Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate (“the FICOD”). The fundamental review follows the technical review, resulting in the Directive 2011/89/EU published in the Official Journal on 8 December 2011.

The European Commission has asked the Joint Committee to conduct ‘an assessment of supervisory practices and experiences, in the context of international developments and recently available legislation, in the areas of (A) scope of application, especially the inclusion of non-regulated entities; (B) internal governance requirements and sanctions, in particular with respect to the obligations of the parent entity; and (C) supervisory empowerment, in particular the necessary legislative provisions in case the parent entity is a (non-regulated) holding company’.

This consultation covers three broad areas where advice is sought by the European Commission: the scope of application, the group-wide internal governance requirements and sanctions and supervisory empowerments under the FICOD.

In its proposed response, the Joint Committee issued a series of recommendations for the review of the FICOD, including the widening of the scope of supervision, addressing requirements and responsibilities to a designated entity within the financial conglomerate and the framework of supervisory powers provided by the FICOD. 

Moreover, the Joint Committee will be providing later this year a supervisory contribution to the wider fundamental review of the FICOD, which is being carried out by the European Commission.

Full consultation paper

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