Position Paper

Guiding principles for EU Equivalence

Other | 8 Apr 19

Appropriate regulation and supervision of financial activities in a cross-border context has been a key regulatory objective against the background of the financial crisis, where a number of jurisdictions were adversely affected by developments outside their jurisdiction. Now, with the full set of post-crisis financial markets regulatory reforms kicking-in, and regulation becoming ever more complex, it is important to highlight that the current EU equivalence processes and determinations need to be reformed to address identified shortcomings, such as transparency and predictability. While there is a need to recognise that capital flows are global and that the EU financial markets should fit into a globally competitive model, any equivalence regime also needs to preserve stability and a level playing field between the EU and third countries. This overarching goal should not only be interpreted in terms of market access – but also in relation to the broader political objectives enshrined in EU legislation, such as investor protection, financial stability and the overall integrity and efficiency of markets.

 

This paper includes key guiding principles that may be considered for the planned reforms of the EU’s equivalence regimes in different pieces of legislation.