We very much welcome the Commission’s fitness check of the EU reporting requirements in the financial sector to analyse the shortfalls associated with supervisory reporting, taking a horizontal approach. We agree it is important to look at whether the requirements are meeting their objectives, to analyse the consistency of regulatory frameworks, and measure the cost and burden of the reporting obligations to see whether they are reasonable and proportionate.
Nevertheless, we are concerned that that this fitness check, similarly to the EU cumulative impact assessment on financial services legislation performed in 2015, seems to focus solely on the financial sector (i.e. intermediaries and investment companies). Meanwhile, there is a strong need for a fitness check and / or measure the cumulative impact of financial legislation and other regulation on non-financial companies as users of financial markets.
To achieve stronger and more liquid capital markets fuelling growth and jobs in Europe, we need proportionate and consistent regulatory approach which does not overburden companies that otherwise may look for financing elsewhere. Since 2009 we have witnessed a ‘regulatory tsunami’. While this legislation has been primarily targeted at financial companies, a lot of it has spilled over onto non-financial companies. Despite the change of the regulatory approach since 2015, there are many new regulatory obligations on non-financial listed companies, some of them still in the pipeline. While the cumulative impact and fitness check exercises seem to focus at reviewing legislation impacting the financial sector only.
Therefore, to promote capital markets and ensure a Better Regulation approach, we call again for a fitness check and /or cumulative impact assessment targeted at non-financial companies using capital markets for financing and risk mitigating purposes. As a starting point, we would very much appreciate if the Commission enlarged the scope of the fitness check of the EU reporting requirements, to ensure that various reporting requirements EU listed companies face, are taken into consideration (including EMIR, MiFID II, MAR, Transparency Directive, Accounting Directive, REMIT, Non-Financial Information Directive, DAC 4 implementing BEPS Action 13 on CBCR, etc.). As a next step, we would like this exercise to be complemented by additional analysis covering company law and corporate governance requirements to have a full picture or regulatory requirements EU listed companies face.
As a conclusion, we believe that extending the scope of the fitness check to non-financial companies is necessary to make sure that this exercise delivers a positive impact on the real economy.
We are thankful for your consideration and we remain at disposal to discuss further.
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