Current financial services legislative proposals

Information from the Presidency

in July, co-legislators had reached an agreement at trilogues regarding Amendments to the Alternative Investment Fund Managers Directive (AIFMD) and to the Directive relating to undertakings for collective investment in transferable securities (UCITSD);
the Presidency also concluded technical work on Amendments to the Markets in Financial Instruments Directive (MiFID 2) and Amendments to the Markets in Financial Instruments Regulation (MiFIR) - Consolidated tape;
- welcomed the work carried out by the Swedish Presidency, under which the first provisional political agreement was reached;
negotiations on the Crisis Management and Deposit Insurance (CMDI) package were ongoing:
the Presidency hoped to reach an general approach on Review of the European market infrastructure Regulation (EMIR) - Clearing Package before the end of the year;
- work still needed to be done in order to bring positions closer together;
the following proposals were on track:
there were ongoing trilogues on the following files, that the Presidency expected to conclude before the end of the year:
the Presidency was willing to start trilogues as soon as the Parliament was ready on:
- Listing act package:
work was ongoing with regard to the Anti-Money Laundering Authority (AMLA) . The Commission had already launched the call for applications, and negotiations on the selection process were on track;
regarding the Prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLR), and the Prevention of the use of the financial system for the purposes of money laundering or terrorist financing: mechanisms to be put in place by the Member States (AMLD 6), the Presidency hoped to reach an political agreement before the end of the year.

Mairead McGuinness, Commissioner for Financial Stability, Financial Services and the Capital Markets Union

getting closer to the European elections, it was important to conclude as many files as positions as possible;
on anti-money laundering (AML) package, work was advancing, and co-legislators' teams were meeting "almost everyday" to find solutions to remaining issues;
- there was a good chance to reach agreement on the package;
- she referred to the importance of keeping the momentum going particularly on the final decision making process for AMLA's seat;
- she called on the Parliament and the Council to remain open, pragmatic, and flexible to reach a solid an operational agreement on the final process, so that the seat could be decided in early 2024;
the Commission welcomed the support and aim to conclude the proposal on instant payments under the Spanish Presidency, and looked forward to the next trilogue;
trilogues had started regarding Solvency II and IRRD, and she welcomed the ambition of co-legislators to reach an agreement before the end of the year;
she welcomed the Spanish Presidency's intention to reach a general approach on CMDI package;
- rapporteurs of the files wanted to adopt the files by the end of 2023;
on Capital Markets Union (CMU):
- co-legislators successfully concluded trilogues on the AIFMD, completing the last step in negotiating the CMU package adopted in November 2021, after agreements on European Long-Term Investment Funds (ELTIFs) Regulation, European Single Access Point (Amending certain Directives as regards the establishment and functioning of the European single access point (ESAP) - Directive Amending certain Regulations as regards the establishment and functioning of the European single access point (ESAP) - Regulation & Establishing a European Single Access Point (ESAP) providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability - Regulation), and MiFIR over the last months;
- she highlighted that CMU remained incomplete and it was important to advance on the remaining CMU files, such as the Listing Act package;
- - trilogues on the Listing act should be able to start before the end of the Spanish Presidency;
  - she hoped that in trilogues, the high level of ambition of all parts of the proposals were maintained: rules on Prospectus, market abuse research, and multiple-vote share rights;
- discussions on Directive on corporate insolvency were moving rather slowly;
- - efficient insolvency procedures were essential for investments and capital flows across the market;
  - only half of the articles had been discussed at the Council working party since the proposal was adopted in December 2022;
  - the ministerial debate at the October Justice and Home Affairs Council needed to facilitate negotiations at technical level, and should not limit any room for finding technical solutions at a later stage;
  - she called for not to dilute the minimum protections for creditors proposed in the Commission's proposal;
  - Finance and Justice ministries had to work closely together to accelerate the work;
  - the proposal could be seen as significantly technical, but it was key to focus on it because it tackled a long standing barrier that fragmented the single market for capital;
- on the Retail Investment Strategy package, work was ongoing. it was important as a building block of the CMU;
- - the Commission welcomed the intention to reach a general approach in autumn;
the proposal on Faster and Safer Relief of Excess Withholding Taxes was presented in June 2023, and the Presidency was ambitious about it. Negotiations were going fast;
- it was necessary to find the balance between two important objectives: fighting tax fraud and supporting cross-border investment;
- the anti tax fraud element should not be strengthened at the expense of the CMU element to encourage cross-border investments;
on EMIR, it was important to reach a meaningful general approach. The file was crucial for the EU's economic security and open strategic autonomy;
- the excessive dependence on central counterparties (CCPs) located outside of the EU created significant risks for the financial stability of the EU, and for the transmission of monetary policy;
the common objective of deepening the CMU would not be achievable if the EU relied almost exclusively on market infrastructures outside the EU for critical services;
- CMU was a "must have";
in order to compete in terms of innovation, it was key to have a large and liquid capital market;
she understood short term concerns regarding EMIR, but called for focusing on the long term goals regarding that area;
- she urged the Council to make progress on two main elements: an appropriately calibrated but ambitious active account, and adequate powers for the European Securities and Markets Authority (ESMA) to monitor and address risks in the clearing space;
- the Commission was ready to support the Presidency and MS;
regarding ESG ratings proposal presented in June, the Commission supported the Presidency's ambition to conclude an agreement at Council level by the end of the year;
- the Parliament seemed ready to start trilogues in 2024, which could allow to conclude the file before the end of the mandate;
in terms of sustainable finance, the Commission adopted the European sustainability reporting standards (ESRS) – first set in July 2023;
- it was important to give market participants clarity as soon as possible, so that they could prepare their reporting while reducing complexity as much as possible;
- the delegated act (DEA) on the standards, and the latest taxonomy delegated acts (Taxonomy Environmental Delegated Act (Taxo4) & Amendments to the EU Taxonomy Climate Delegated Act) were currently under the scrutiny of co-legislators;
during the last week of June, the Commission also presented a series of important initiatives in digital finance, and welcomed that the Presidency had started working on all of them:
- the proposal on the digital euro, and on the Proposal for a Regulation: Clarifying the legal tender status of euro banknotes and coins, had understandably received significant attention;
- - the Commission welcomed the continued democratic debate on the matter, both at Council and Parliament level;
  - the Commission and the ECB continued their efforts to ensure that cash and the digital euro were not played off against each other;
- - the Commission welcomed the technical work on the digital aspects of both proposals;
work on the Payment services and electronic money services in the Internal Market and the Framework for Financial Data Access;
- the Commission welcomed the Presidency's intention to cover all building blocks that could lead to tabling the first compromises.

called on the Commission, by the end of the current legislative cycle, to include the activities of mining extraction and processing, as well as the recycling of critical raw materials, in the Taxonomy;
it should be done in accordance with the highest environmental standards;
welcomed if the Commission could share with the Council the proposals for the next phases regarding Taxonomy.

agreed with France on the issue of including mining related activities in Taxonomy;
raw materials were needed for the green transition.

agreed with the suggestion to include the activities of mining extraction and processing, as well as the recycling of critical raw materials;
critical raw materials were important for achieving the objectives of the green deal.

welcomed the French's proposal on Taxonomy.

appreciated that France had raised the issue;
reiterated the support efforts to direct private funding to investments in sustainable finance;
supported the idea of including mining related activities in the Taxonomy.

supported the request from France;
called on the Commission to provide information on its plans in that regard;
including mining processing and recycling of critical raw materials in the Taxonomy -in accordance with environmental standards- would be beneficial.

Mairead McGuinness, Commissioner for Financial Stability, Financial Services and the Capital Markets Union

thanked France for raising the topic;
she agreed with mining being included in Taxonomy, but it first had to comply with all the strict criteria;
the Commission had tasked the Platform on Sustainable Finance to develop taxonomy criteria for mining and refining;
there was not a clear timeline yet, but the Commission would try to have it ready before the end of the current legislative mandate.

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