The European Commission is planning a radical reform of financial markets to strengthen the EU against Wall Street. As Politico reports, the Commission plans to unveil a sweeping package of changes in December that will redraw the rules for financial markets across the Union and create a single market to compete with the US model.
The three sources Politico spoke to said the proposal would include changes to at least 10 laws, ranging from regulation of investment products and cryptocurrencies to adjustments to the structure of the European financial system. Politico notes that the main goal is to increase the availability of investment for a European industry struggling to keep up with fast-growing competitors in the US and China.
US markets have much more capital for smaller companies, which often leads to successful European startups moving to the US. The server points out that Brussels is trying to reverse this trend and sees an open capital market as the key to deeper economic integration in the EU, but the changes are likely to spark political disputes between member states as some countries oppose centralised EU oversight.
The proposal was presented last week at a three-hour closed session for representatives of the Member States and the European Parliament. The changes will affect key regulations - MiFID, MiFIR, EMIR, AIFMD, UCITS, CSDR, MiCA and the functioning of ESMA.
The Commission plans to transfer the supervision of firms operating in financial markets from the national level to a central level under ESMA. The server points out that this move is politically sensitive - smaller countries such as Luxembourg and Ireland are worried about the transfer of their firms, while France is the main proponent of centralisation.
According to Politico, ESMA would get an independent executive board and more fee-based funding from the industry. Oversight of cryptocurrencies and large cross-border exchanges, clearing houses and central depositories would move under a central EU body. The package is due to be published in December and discussed at an EU summit the same month, and will be a politically sensitive issue.
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