EU market integration and efficient supervision

Key Points

The EESC:

• considers that capital markets contribute to capital allocation, and reflect a society's confidence in its own future;
• calls on the co-legislators to support the objectives and measures set out in the European Commission’s proposals and stresses that more ambitious reforms are needed; calls on Member States to commit firmly to capital markets integration and to develop local markets;
• calls on the co-legislators to support central supervision of market infrastructures with significant cross‑border activities; stresses that supervision should deliver identical outcomes across the EU; recommends a clear allocation of responsibilities to reduce duplication and complexity, and coordination to avoid overlapping layers of supervision;
• calls to consider removing further overlapping reporting obligations across sectoral legislation, as well as to ensuring a level playing field during the negotiations; recommends additional to incentivise clearing by fund managers; calls to assess the application of the principle of proportionality under the DORA framework;
• calls for measures to strengthen transparency and reduce liquidity fragmentation in EU equity markets; recommends reinforcing a level playing field among execution mechanisms, including a review of transparency requirements for systematic internalisers (SIs); proposes that ESMA and the UK Financial Conduct Authority work together to resolve data issues; supports the proposed inclusion of SIs in the pre‑trade equity consolidated tape;
• proposes to consider establishing a category of ‘covered cross‑border bonds’ for large private placements under an EU‑level rulebook with ESMA supervision. The EU should draw pragmatic lessons from successful initiatives abroad. A relevant example is the US National Securities Markets Improvement Act (NSMIA);
• welcomes the efforts to facilitate innovation and remove regulatory obstacles to distributed ledger technology (DLT)-based innovation;
• supports the review of the Settlement Finality Directive and the Financial Collateral Directive; recommends assessing proposed changes to the settlement facility in order to ensure that the disapplication of standard insolvency rules is not unduly broadened.