ASCG comments on the EU’s  ESA consultation

Today, the Accounting Standards Committee of Germany (ASCG) submitted its response on the European Commission’s consultation on the operations of the three European Supervisory Authorities (EBA, EIOPA and ESMA).

On 21 March 2017, the European Commission had launched a public consultation on the European Supervisory Authorities (see our previous news story). Although the focus of the 32 questions is concerned with the effectiveness of the individual authorities, two questions were aimed specifically at ‘financial reporting and audit’. The Administrative Board of the ASCG had discussed the paper at its 27 March meeting and decided on a response. The Secretariat developed draft responses on questions 14 and 15 and submitted them to the Administrative Board’s members for review and approval.

In its final response, the Administrative Board came to the conclusion that no sufficiently convincing case had been made for as to why changes to the current setup were needed and why ESMA’s coordination and enforcement role should be enhanced. Especially, the Administrative Board has not been made aware of any real deficiencies that warranted action. As regards taking on EFRAG’s responsibilities in the endorsement process, the ASCG’s Administrative Board concluded it has not seen any convincing arguments either. Not only had EFRAG just come out of a comprehensive structural reform that started to bear fruit and seemed to work. Moreover, a vast majority of the respondents to the so-called Maystadt consultation of 2014 did object to ESMA taking over EFRAG’s activities. Hence, the Commission would be ill-advised to question a functioning system without any compelling need.

You can find the complete letter here.