Commission Communication on Financial Services 2010-2011 – "Regulating financial services for sustainable growth"
02 June 2010
The Commission outlined its work programme for the next months, stating that it will come forward with proposals on the functioning of derivatives markets in summer, and will also propose appropriate measures on short selling and credit default swaps, including 'naked short-selling'.
The recent market turbulence has confirmed the need for the Commission to move swiftly in completing the necessary reforms to ensure a safe and sound European financial system. That is why the Commission has committed itself to table the remaining proposals financial reform proposals needed to implement fully our G20 Commitments in the next six to nine months from now. Key proposals include:
· Transparency: the Commission will come forward with proposals to improve the functioning of Derivatives markets in the summer. This will be instrumental in increasing transparency on a market which is important but currently very opaque.In order to restore further confidence in financial markets, the Commission will propose appropriate measures on short selling and credit default swaps, including 'naked short-selling'. The Commission will also table improvements on the Markets in Financial Instruments Directive (MiFID) in order to strengthen pre- and post-trade market transparency and bring more derivatives onto organised trading venues.
· Responsibility:In order to protect investors and depositors, the Commission will propose a revision of the Deposit Guarantee Schemes Directive and the Investor Compensation Schemes Directive. Also, legislative proposals on packaged retail investment products will be presented to promote consumers' interests in the sales process. The Market Abuse Directive will also be revised in order to extend its rules beyond regulated markets and to include derivatives in its scope of application. The Commission will come forward with amendments to the Capital Requirements Directive (CRD IV) to improve the quality and quantity of capital held by banks, introduce capital buffers and ensure the build up of capital in good times which may be drawn on in more adverse economic conditions. Furthermore, on enforcement, sanctions in the financial sector are largely unharmonised, leading to diverging practices among national supervisors. As a first step, the Commission will present a Communication on sanctions in the financial services sector to promote convergence of sanctions across the range of supervisory activities.
· Crisis prevention and management: The Commission will publish an action plan on crisis management leading to legislative proposals for the prevention and resolution of failing banks. The Commission will also work towards global convergence on one set of high quality international accounting standards.
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