The Bundesrat

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prudential requirements of investment firms and amending Regulations (EU) No 575/2013, (EU) No 600/2014 and (EU) No 1093/2010

Scrutiny details

Subsidiarity deadline: 09/03/2018
Scrutiny Information

Scrutiny date: 02/03/2018

Subsidiarity Concern:

No Important information to exchange

No Veto

Information on parliamentary scrutiny

Referred to Committees on:

European Union Questions
Legal Affairs
Economic Affairs

Lisbon Treaty procedures
  Political Dialogue

02/03/2018 | Scrutiny results - COM20170790

The Bundesrat welcomes the Commission’s initiative, as expressed in the proposal, to strengthen capital markets, promote investment, develop new sources of financing for companies, offer better opportunities to private households and strengthen the EMU. The Bundesrat supports the Commission in its goal to complete the capital markets union by 2019. It welcomes the Commission’s intent to create a framework of supervision of investment firms that is tailor-made for this branch. The Bundesrat notes that investment firms assume activities of other market participants (e.g. Alternative Investments Funds). The proposal, in its current form, could potentially lead to a double supervision, entailing additional and unnecessary costs. The Bundesrat has concerns whether the determination of the required equity is manageable for small investments firms (level 2). The requirements towards level-2-investment firms should not be higher than those towards system-relevant ones. Given the differences in determining the required equity, it should not be the case that system-relevant firms require a lower capital adequacy than non-system-relevant ones.

Furthermore, a future change of the definition of small, not interlinked investment firms (level 3), should only be possible by including the European Parliament and the Council. The Bundesrat deems a fundamental change in the regulatory system that investment firms that are system-relevant are to be equated to credit institutions. With regard to the Brexit, uniform regulatory and supervisory standards for EU- and third-country investment firms are important.

The Bundesrat sees a need for change regarding market operators and investment firms operating a trading platform, that are required to publish certain information during the usual trading hours on a continuous basis. The Bundesrat points out that market transactions affected by the proposed regulatory change have been existing outside of Europe for a longer time, while in the EU they have become relevant only with the adoption of Reg. (EU) No. 648/2012. For these market transactions, the Bundesrat notes a substantial regulatory gap: the publication of pre-trade information, as previsioned by Article 8 para. 1 of Reg. (EU) No. 600/2014 in its current form, is practically impossible for market operators for these forms of market transactions. This has obviously been overlooked.

Contact points for EU matters

IPEX Correspondents:
Phone: 030 18 9100-454  Email Ms. Johanna Mai Phone: +49 (0) 301 891 00 471  Email Mr. Michael Hoessl
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