In January, ECSDA responded to the Call for evidence of the European Commission on the EU regulatory framework for financial services. This large scale consultation was an opportunity for the industry to define priorities for the Capital Markets Union project (CMU), an action plan aimed at supporting growth and financial integration within the EU market.
ECSDA’s contribution included several suggestions for improving the quality of law-making in relation to post trade services. In particular, we recommended that:
- The European Commission should reconsider its approach on impact assessments to add a stronger focus on the impact of legislative proposals on economic growth and job creation.
- The “Level 1” and “Level 2” processes should be reviewed to avoid unnecessary technical details in binding legislation and to support more consistency between both levels.
- Law-makers should avoid overlapping requirements and the inconsistent use of terminology across sectorial pieces of EU law. The notions of “custody” and “safekeeping”, for example, appear in several pieces of EU law without always being clearly defined, which results in legal uncertainty as regards the applicability of AIFMD requirements to CSDs.
- The EU legislator should avoid imposing requirements on unregulated entities (such as transfer agents and registrars) indirectly via regulated entities (CSDs), especially when the regulated entities do not have the means to force third parties to comply with the applicable EU rules.
- Finally, EU law should allow for more calibration of the requirements as regards smaller and less systemically important infrastructures.
Some of the comments made by ECSDA were supported by several other respondents and were analysed in detail by the EU institutions.