ITALY: CONSOB Publishes Paper on EU Supervision of the Financial Market

Monday September 4 2017

The CONSOB Legal Paper entitled ‘New institutional arrangements of the European supervision of the financial market and the banking system’ has been published.

The Paper primarily tackles the main aspects of the recent evolution of European financial regulation.  It initially illustrates the “four-level” regulatory structure established by the “Lamfalussy” process and, later, the fundamental features of the institutional design that, on the bases of the recommendations of the report from the “De Larosière” group, took the form of the European System of Financial Supervision (ESFS).

The paper also analyses the changes made to the current multi-level rule making system, usually defined as the “single rulebook”, providing a few insights into the open issues and the possible trends for the future, which seem to move towards objectives of streamlining and simplification of the reference regulatory framework.

It then refers to the forms of connection between Italian law and EU regulatory processes, both in terms of participation of the national authorities in forming EU policies and decisions, and in terms of the implementation of European regulations at the domestic level.

Furthermore, it addresses the reconstruction of the legal context, both European and national, following the establishment of the European Banking Union (EBU), with particular reference to the single supervisory mechanism (SSM). A particular focus is placed on the problematic issues resulting from the complex system of interaction between the different levels of supervision, evidencing the coordination difficulties affecting the functions required of the numerous authorities involved, in view of consolidating a fully harmonised financial supervision regime.

Finally, a summary is given of the next step of the European economic and financial integration process, represented by the creation of a Capital Markets Union, foreshadowing possible developments in the current institutional setting.

In conclusion, some reflections are made on the systematic coherence of certain areas of the national financial market supervision framework, in light of the evolution of the European institutional context, providing, in particular, indications that are potentially able to contribute to more cohesive and systematic regulations on the provision of investment services and collective asset management.

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