European Commission publishes Feedback Statement on ESA-Consultation

Following its consultation on the functioning of the three European Financial Supervisory Authorities EBA, EIOPA and ESMA (ESAs), the European Commission published a Feedback Statement on 20 June 2017.

The content should not be regarded as reflecting the position of the Commission. The following aspects seem worth mentioning as they reflect the ASCG’s position in its comments to the consultation (we reported):

• The vast majority of respondents are of the view that there is no reason to change the current endorsement process or the role of EFRAG. EFRAG has been operating successfully under the new governance structure since November 2014 following the implementation of the Maystadt recommendations. These stakeholders believe that strengthening the role of ESMA could be counterproductive as ESMA would consider the standards only from the perspective of investors. A clear separation of powers between standard setting and enforcement should be maintained to avoid conflict of interest.
• An overwhelming majority of respondents argue there is no need to strengthen enforcement and supervisory convergence in the field of financial reporting. Enforcement should remain a national responsibility. Regarding possible synergies between enforcement of accounting and auditing standards, a vast majority of stakeholders express doubts.

EBA and ESMA propose to increase their role in the area of financial reporting.

The consultation of the European Commission started on 21 March 2017 and ended on 16 May 2017 (we reported). The ASCG has participated in this consultation and will continue to closely monitor and follow up any further EU activities to shape the tasks and functioning of ESAs