Proposal for a Regulation of the European Parliament and of the Council establishing a European Insurance and Occupational Pensions Authority {COM(2009) 499 final} {COM(2009) 500 final} {COM(2009) 501 final} {COM(2009) 503 final} {SEC(2009) 1233} {SEC(2009) 1234} {SEC(2009) 1235}
Date: 2009-09-23
Institutions: European Commission
Subjects: EU office or agency, activity report, drafting of EU law, economic recession, financial control, financial institution, insurance, operation of the Institutions, pension scheme

EN 

EN 

   EN 

 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.9.2009 
COM(2009) 502 final 

2009/0143 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a European Insurance and Occupational Pensions Authority 

{COM(2009) 499 final} 
{COM(2009) 500 final} 
{COM(2009) 501 final} 
{COM(2009) 503 final} 
{SEC(2009) 1233} 
{SEC(2009) 1234} 
{SEC(2009) 1235} 

EN 

   EN 

 
 
  
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Experience of the financial crisis has exposed important failures in financial supervision, both 
in  particular  cases  and  in  relation  to  the  financial  system  as  a  whole.  President  Barroso 
therefore  requested  a  group  of  high  level  experts,  chaired  by  Mr  Jacques  de  Larosière,  to 
make  proposals  to  strengthen  European  supervisory  arrangements,  with  the  objective  of 
establishing a more efficient, integrated and sustainable European system of supervision. The 
Group  presented  its  report  on  25  February  2009.  Building  on  its  recommendations,  the 
Commission  set  out  proposals  for  a  new  European  financial  supervisory  architecture  in  its 
Communication to the Spring European Council of March 2009. The Commission presented 
its ideas in more detail in its Communication of May 2009 which proposed: 

–  Establishing a European System of Financial Supervisors (ESFS), consisting of a network 
of  national  financial  supervisors  working  in  tandem  with  new  European  Supervisory 
Authorities  (ESAs),  created  by 
the  existing  European  supervisory 
committees1  into  a  European  Banking  Authority  (EBA),  a  European  Insurance  and 
Occupational  Pensions  Authority  (EIOPA),  and  a  European  Securities  and  Markets 
Authority  (ESMA),  thereby  combining  the  advantages  of  an  overarching  European 
framework  for  financial  supervision  with  the  expertise  of  local  micro-prudential 
supervisory bodies that are closest to the institutions operating in their jurisdictions; and 

transforming 

–  Establishing  a  European  Systemic  Risk  Board  (ESRB),  to  monitor  and  assess  potential 
threats  to  financial  stability  that  arise  from  macro-economic  developments  and  from 
developments within the financial system as a whole. To this end, the ESRB would provide 
an early warning of system-wide risks that may be building up and, where necessary, issue 
recommendations for action to deal with these risks.2  

2. 

CONSULTATION OF THE INTERESTED PARTIES 

Two  open  consultations  were  conducted  in  the  development  of  these  proposals.  Firstly, 
following  the  report  of  the  high-level  group  chaired  by  Mr  Jacques  de  Larosière  and  the 
publication of the 4 March 2009 Commission Communication, the Commission organised a 
consultation  from  10  March  to  10  April  2009  as  input  to  its  Communication  on  Financial 
Supervision  in  Europe  published  on  27  May  2009.  A  summary  of  the  public  submissions 
received can be found on: 

http://ec.europa.eu/internal_market/consultations/docs/2009/fin_supervision/summary_en.pdf 

Secondly,  from  27  May  to  15  July  2009,  the  Commission  organised  another  consultation 
round, inviting all interested parties to comment on the more detailed reforms presented in the 

1 

2 

These  are  the  Committee  of  European  Banking  Supervisors  (CEBS),  the  Committee  of  European 
Insurance and Occupational Pensions Supervisors (CEIOPS) and the Committee of European Securities 
Regulators (CESR). 
It should be noted that this explanatory memorandum focuses on the proposals to establish the ESFS by 
transforming  the  existing  European  supervisory  committees  into  ESAs.  The  proposal  to  establish  the 
ESRB is being discussed in a separate memorandum. 

EN 

2 

   EN 

                                                 
May  Communication  on  Financial  Supervision  in  Europe.  The  responses  received  were  for 
the greater part supportive of the suggested reforms, with comments on detailed aspects of the 
proposed ESRB and ESFS. A summary of the public submissions received can be found on: 

http://ec.europa.eu/internal_market/consultations/docs/2009/fin_supervision_may/replies_su
mmary_en.pdf 

3. 

IMPACT ASSESSMENT 

The May Commission Communication on Financial Supervision in Europe was accompanied 
by  an  impact  assessment  analysing  the  main  policy  options  for  establishing  the  ESFS  and 
ESRB.  A  second  impact  assessment  accompanies  these  proposals,  examining  the  options  in 
more detail. The second impact assessment report is available on the Commission website. 

4. 

LEGAL ELEMENTS OF THE PROPOSAL 

The Court of Justice has acknowledged3 that Article 95 of the Treaty relating to the adoption 
of measures for the approximation of legislation for the establishment and functioning of the 
internal  market  provides  an  appropriate  legal  basis  for  setting  up  a  "Community  body 
responsible for contributing to the implementation of a process of harmonisation", when the 
tasks  conferred  on  such  a  body  are  closely  related  to  the  subject-matter  of  the  acts 
approximating the national legislations.  

The  financial  and  economic  crisis  has  created  real  and  serious  risks  to  the  stability  of  the 
internal  market.  Restoring  and  maintaining  a  stable  and  reliable  financial  system  is  an 
absolute  prerequisite  to  preserving  trust  and  coherence  in  the  internal  market,  and  hence  to 
preserve  and  improve  the  conditions  for  the  establishment  of  a  fully  integrated  and 
functioning  internal  market  in  the  field  of  financial  services.  Moreover,  deeper  and  more 
integrated  financial  markets  offer  better  opportunities  for  financing  and  risk  diversification, 
and thus help to improve the capacity of the economies to absorb shocks. Financial integration 
and  stability  are  therefore  mutually  reinforcing.  The  establishment  of  the  ESFS  will  be 
accompanied by the development of a single rule book which will ensure uniform application 
of rules in the EU and thus contribute to the functioning of the internal market. The task of the 
ESAs will be to assist the national authorities in the consistent interpretation and application 
of the Community rules.  

As the tasks to be conferred on the Authorities are closely linked to the measures put in place 
as  a  response  to  the  financial  crisis  and  to  those  announced  in  the  Commission 
Communications of 4 March and 27 May 2009, they can, in line with the Court's case law, be 
established on the basis of Article 95 of the Treaty. 

Community action can address the weaknesses highlighted by the crisis and provide a system 
that  is  in  line  with  the  objective  of  a  stable  and  single  EU  financial  market  for  financial 
services  –  linking  up  national  supervisors  into  a  strong  Community  network.  However,  the 
focal  point  for  day-to-day  supervision  will  remain  at  the  national  level,  with  national 
supervisors remaining responsible for the supervision of individual  entities. In this way, the 
provisions do not go beyond what is strictly necessary to achieve the objectives pursued. The 

3 

See CJCE, C-217/04, pt. 44.  

EN 

3 

   EN 

                                                 
proposals are therefore in accordance with the principles of subsidiarity and proportionality as 
set out in Article 5 of the Treaty. 

5. 

BUDGETARY IMPLICATIONS 

For the transformation of the existing European supervisory committees into effective ESAs, 
enhanced resources are needed - both personnel and budgetary. An overview of the budgetary 
implications  of  these  proposals  is  presented  in  the  impact  assessment  report  and 
accompanying legislative financial statements (attached to this proposal). 

6. 

DETAILED EXPLANATION OF THE PROPOSAL 

In  order  to  take  account  of  sectoral  specificities,  three  separate  Regulations  are  needed  to 
establish the Authorities for banking, insurance and occupational pensions, and securities. The 
broad  thrust  of  these  proposals  is  however  identical.  This  memorandum  therefore  first 
discusses  the  common  elements  and  briefly  touches  upon  the  differences  between  the  three 
Regulations.  

6.1. 

Establishment of the ESAs and their legal status 

The  objective  of  the  ESAs  shall  be  to  contribute  to:  (i)  improving  the  functioning  of  the 
internal market, including in particular a high, effective and consistent level of regulation and 
supervision,  (ii)  protecting  depositors,  investors,  policyholders  and  other  beneficiaries,  (iii) 
ensuring  the  integrity,  efficiency  and  orderly  functioning  of  financial  markets,  (iv) 
safeguarding  the  stability  of  the  financial  system,  and  (v)  strengthening  international 
supervisory  coordination.  For  this  purpose,  each  ESA  shall  contribute  to  ensuring  the 
coherent, efficient and effective application of the relevant Community law.  

The  ESAs  will  be  Community  bodies  with  a  legal  personality  and  a  key  element  of  the 
proposed  ESFS.  The  latter  shall  function  as  a  network  of  supervisors  and  comprise  the 
national  authorities  in  the  Member  States,  a  Joint  Committee  of  European  Supervisory 
Authorities,  to  cover  cross-sectoral  issues,  and  the  European  Commission.  While  the  ESAs 
should enjoy maximum independence to objectively fulfil their mission, the Commission has 
to be involved where institutional reasons and the responsibilities under the Treaty so require.  

The main decision-making body of each ESA will be its Board of Supervisors, consisting of 
the  heads  of  the  relevant  national  supervisors  as  well  as  the  Chairperson  of  the  respective 
Authority.  The  Chairperson  will  preside  over  meetings  of  the  Board  of  Supervisors  and  the 
Management Board, and act as the head and representative of the Authority. The day-to-day 
management  of  each  Authority  will  be  in  the  hands  of  an  Executive  Director.  As  for  the 
location  of  the  new  ESAs,  it  is  proposed  to  maintain  the  present  place  of  residence  of  the 
existing European committees of supervisors, as this allows for a fast and effective transition 
to the new regime. Section 6.3 discusses the internal organisation of the ESAs in more detail.  

6.2. 

Tasks and powers of the ESAs 

The ESAs will take on all the tasks of the existing European supervisory committees, but in 
addition  have  significantly  increased  responsibilities,  defined  legal  powers  and  greater 
authority, as set-out in the Commission Communication of 27 May 2009 and agreed upon by 
the European Council of 18-19 June 2009. 

EN 

4 

   EN 

6.2.1.  Develop technical standards 

The European Council endorsed the Commission's proposal that a single EU rule book should 
be  established,  applicable  to  all  financial  institutions  in  the  Single  Market.  To  this  end, 
differences  in  the  national  transposition  of  Community  law  stemming  from  exceptions, 
derogations, additions or ambiguities must be identified and removed, so that one harmonised 
core set of standards can be defined and applied. To contribute to this, the Authorities will, in 
areas  specified  in  the  relevant  sectoral  legislation,  develop  draft  technical  standards.  These 
standards constitute an effective instrument to strengthen Level 3 of the Lamfalussy structure, 
which  currently  is  limited  to  the  adoption  of  non-binding  guidelines.  The  areas  where  the 
Authority may develop such draft standards concern issues of a highly technical nature where 
uniform conditions for the application of Community legislation are needed. These matters do 
not  involve  policy  decisions  and  their  content  is  tightly  framed  by  the  Community  acts 
adopted  at  Level  1  (see  the  accompanying  Commission  Staff  Working  Paper  for  a  detailed 
discussion on the necessary changes to the relevant Community legislation). Development of 
the standards by the ESAs ensures that they benefit in full from the specialised expertise of 
national supervisors.  

The  draft  technical  standards  will  be  adopted  by  the  Authority  on  the  basis  of  qualified 
majority of the members of the Boards of Supervisors, as defined in Article 205 of the Treaty. 
The  Community  legal  order  requires  the  Commission  to  subsequently  endorse  these  draft 
standards  in  the  form  of  regulations  or  decisions  so  as  to  give  those  direct  legal  effects.  In 
very  exceptional  cases,  and  only  for  reasons  of  Community  interest,  the  Commission  may 
decide  to  endorse  the  standards  in  part,  or  with  amendments,  or  not  at  all,  the  reasons  for 
which  it  has  to  make  available  to  the  Authority.  The  Commission's  proposal  is  without 
prejudice to discussions on future procedures in the context of the transition to a new Treaty. 

For the purpose of consultation with stakeholders, a Stakeholder Group will be established for 
each ESA, consisting of representatives of the industry, financial sector employees and users 
of financial services. The relative proportions of each should be balanced and no one group 
should  dominate  over  the  others.  In  those  areas  not  covered  by  the  technical  standards,  the 
ESAs shall, like the existing European supervisory committees, have the possibility to issue 
non binding guidelines and recommendations to national supervisory authorities and financial 
institutions and market participants. If in any specific case authorities choose not to comply 
with the guidelines and recommendations it should explain its decision to the Authority. 

6.2.2.  Powers to ensure the consistent application of Community rules 

Even with a single set of harmonised rules, the application of these rules may, in occasional 
cases,  lead  to  differences  of  opinion  on  the  application  of  Community  legislation.  Without 
prejudice  to  the  initiation  of  infringement  proceedings  by  the  Commission  against  Member 
States,  the  ESAs  should  therefore  have  a  general  power  to  contribute  to  ensuring  coherent 
application  of  Community  legislation.  To  this  end,  a  mechanism  should  be  put  in  place  to 
address  behaviour  by  national  supervisory  authorities  who  are  considered  to  be  diverging 
from  the  existing  Community  legislation  (including  the  technical  standards  discussed  in 
6.2.1). This mechanism consists of three different steps: 

First, the ESAs, on their own initiative or upon request from one or more national supervisors 
or  from  the  Commission,  would  investigate  these  cases  and,  where  necessary,  adopt  a 
recommendation for action addressed to the supervisory authority. Within the general duty of 

EN 

5 

   EN 

compliance with Community legislation the supervisory authority would be called to comply 
with the recommendation within one month. 

Second,  if  the  recommendation  is  not  complied  with,  the  European  Commission  may,  after 
being  informed  by  the  ESA  or  on  its  own  initiative,  take  a  decision,  requiring  the  national 
supervisory  authority  to  either  take  specific  action  or  to  refrain  from  an  action.  The  latter 
shall, within ten working days of receipt of the decision, inform the Commission and the ESA 
of the steps it has taken or intends to take to implement this decision.  

Third,  in  the  exceptional  situation  that  the  supervisory  authority  does  not  comply  with  the 
latter,  the  ESAs  may  as  a  last  resort  adopt  a  decision  addressed  to  financial  institutions  in 
respect  to  Community  law  which  is  directly  applicable  to  them  (i.e.  Regulations).  This  is 
without prejudice to the Commission's powers to enforce its own decision. 

6.2.3.  Action in emergency situations 

The ESAs shall fulfil an active coordination role between national supervisory authorities, in 
particular  in  case  of  adverse  developments  which  potentially  jeopardise  the  orderly 
functioning  and  integrity  of  the  financial  system  in  the  EU.  However,  in  some  emergency 
situations,  coordination  may  not be  sufficient,  notably  when  national  supervisors  alone  lack 
the tools to respond rapidly to an emerging cross-border crisis. The ESAs should therefore, in 
such exceptional circumstances, have the power to require national supervisors to jointly take 
specific action. The determination of a cross-border emergency situation involves a degree of 
appreciation, and should therefore be left to the European Commission. This is subject to the 
safeguard  clause  (see  6.2.11).  In  parallel,  work  should  be  accelerated  to  build  a 
comprehensive  cross-border  framework  to  strengthen  the  European  Union's  financial  crisis 
management/resolution systems, including guarantee schemes and burden sharing. 

6.2.4. 

Settlement of disagreements between national supervisory authorities 

A  mechanism  is  proposed  to  ensure  that  relevant  national  supervisory  authorities  take  due 
account of the interests of other Member States, including within colleges of supervisors. If a 
supervisory authority disagrees on the procedure or content of an action or inaction by another 
supervisory authority where the relevant legislation requires cooperation, coordination or joint 
decision  making,  the  Authority,  at  the  request  of  the  supervisory  authority  concerned,  may 
assist  the  authorities  in  reaching  a  common  approach  or  settle  the  matter.  This  mechanism 
consists of three possible steps:4 

First,  if  one  or  more  national  supervisory  authorities  request  the  ESA  to  assist  in  resolving 
such  disagreements,  it  may  first  set  a  phase  of conciliation between the authorities  to  try to 
reach agreement among themselves, with the involvement of the Authority as necessary in a 
mediatory capacity.  

Second, if, after a phase of conciliation, they have not been able to reach such an agreement, 
the  ESAs  may,  through  a  decision,  settle  the  matter.5  However,  this  would  clearly  be 

4 

5 

See  the  accompanying  Staff  Working  Paper  for  additional  information  on  the  dispute  settlement 
mechanism. 
The  settlement  competence  is  without  prejudice  to  Article  8,  which  focuses  on  situations  of  non-
compliance with Community law by a competent national supervisory authority. 

EN 

6 

   EN 

                                                 
exceptional as in most cases the respective national authorities should be able to come to an 
agreement in the preceding conciliation procedure. 

Third,  in  case  of  non-compliance  by  a  supervisory  authority  with  the  previous  decision,  the 
Authority  may  also  decide  to  adopt  decisions  addressed  to  financial  institutions  specifying 
their  obligations  in  respect  of  Community  law  which  is  directly  applicable  to  financial 
institutions. 

It  should  be  stressed  that  the  dispute  settlement  mechanism  should  only  address  material 
issues, e.g. cases where action or inaction by a supervisory authority has a serious detrimental 
impact  on  the  ability  of  a  supervisory  authority  to  protect  the  interest  of  depositors,  policy 
holders, investors, or persons to whom services are provided in one or several other Member 
States, or on the financial stability of these Member States. The Authority reserves the right 
not to launch a settlement procedure or adopt any decision where such requirements are not 
fulfilled. These arrangements are subject to the safeguard clause (see 6.2.11). 

6.2.5.  Colleges of supervisors 

Colleges of supervisors are central to the EU supervisory system and play an important role in 
ensuring a balanced flow of information between home and host authorities. The ESAs will 
contribute to promoting the efficient and consistent functioning of colleges of supervisors and 
monitoring  the  coherence  of  the  implementation  of  Community  legislation  across  colleges. 
Against this background, the ESAs may participate as observers in colleges of supervisors and 
receive all relevant information shared between the members of the college. 

6.2.6.  Common  supervisory  culture,  delegation  of  tasks  and  responsibilities  and  peer 

reviews 

The ESAs shall play an active role in building a common European supervisory culture and 
ensuring uniform procedures and consistent supervisory practices throughout the Community. 
In  combination  with  the  mechanism  to  settle  disagreements  between  national  supervisory 
authorities, the common supervisory culture should help build trust and cooperation, and may 
increasingly create opportunities for supervisors to delegate certain tasks and responsibilities 
to one another. The ESAs shall facilitate this by identifying tasks and responsibilities which 
can be delegated or jointly exercised as well as by promoting best practices. In this respect, 
the Authority shall encourage and facilitate the set-up of joint supervisory teams. Moreover, 
the ESAs shall periodically conduct peer review analysis of national supervisory authorities.  

6.2.7.  Assessment of market developments 

One of the new tasks assigned to the existing European supervisory committees in the revised 
Commission Decisions adopted on 23 January 2009 is the monitoring, assessing and reporting 
on  trends,  potential  risks  and  vulnerabilities  in  the  banking,  insurance  and  securities  sector. 
Although  the  proposed  ESRB  will  be  responsible  for  macro-prudential  analysis  of  the  EU 
financial  sector,  the  ESAs  should  continue  the  work  of  the  existing  European  supervisory 
committees  in  this  area  as:  (i)  the  focus  of  their  analysis  is  different,  i.e.,  micro-prudential 
analysis  provides  a  bottom-up  analysis,  rather  than  macro-prudential  analysis  which  is  top-
down,  and  (ii)  their  analysis  may  serve  as  helpful  input  into  the  work  carried-out  by  the 
ESRB. 

EN 

7 

   EN 

6.2.8. 

International and advisory role 

Through these  proposals  the Commission is  clearly responding to the weaknesses identified 
during the crisis as well as to the G20 call to take action to build a stronger, more  globally 
consistent, regulatory and supervisory system for financial services. The ESAs could serve as 
helpful  contact  points  for  supervisory  authorities  from  third  countries.  In  this  context,  they 
may,  without  prejudice  to  the  competences  of  the  European  Institutions,  enter  into 
administrative arrangements with international organisations and the administrations of third 
countries.  The  ESAs  may  also  assist  in  preparing  equivalence  decisions  pertaining  to 
supervisory  regimes  in  third  countries.  Moreover,  the  ESAs  may,  upon  request  or  on  their 
own initiative, provide advice to the European Parliament, the Council and the Commission or 
publish opinions, including with respect to the prudential assessments of cross-border mergers 
and  acquisitions.  The  latter  should  provide  for  additional  safeguards  to  ensure  a  sound  and 
objective assessment of future cross-border mergers or acquisitions. 

6.2.9.  Collection of information 

At  the  request  of  the  Authority,  supervisory  authorities  and  other  public  authorities  of  the 
Member States shall provide the Authority with all the necessary information to carry out the 
duties assigned to it by this Regulation. Moreover, the Authority shall, in collaboration with 
the  supervisors  operating  in  colleges  of  supervisors,  define  and  collect  as  appropriate  all 
relevant information from supervisory authorities, in order to facilitate the work of colleges of 
supervisors.  It  shall  establish  and  manage  a  central  system  to  make  such  information 
accessible  to  the  supervisory  authorities  in  colleges  of  supervisors.  In  principle,  all 
information should be transferred to the ESAs by the national supervisory authorities.  

6.2.10.  Relationship with the ESRB 

The proposed framework for EU supervision can only work if the ESRB and ESFS cooperate 
closely. Indeed, the objective of the reform is to ensure a smoother interaction of supervision 
at the macro-prudential and micro-prudential levels. In fulfilling its role as macro-prudential 
supervisor, the ESRB would need a timely flow of micro-prudential information, while micro-
prudential supervision by national authorities would benefit from the ESRB’s insights on the 
macro-prudential environment. The Regulations also specify the procedures to be followed by 
the  ESAs  to  act  upon  recommendations  by  the  ESRB  and  how  the  ESAs  should  use  their 
powers  to  ensure  timely  follow-up  to  recommendations  addressed  to  one  or  more  national 
supervisory authorities. 

6.2.11.  Safeguard 

In  line  with  the  Ecofin  and  European  Council  conclusions  of  June  2009,  which  stress  that, 
without  prejudice  to  the  application  of  Community  law  and  recognising  the  potential  or 
contingent liabilities that may be involved for Member States, decisions by the ESAs should 
not  impinge  on  the  fiscal  responsibilities  of  the  Member  States,  a  safeguard  clause  is 
introduced.  This  clause  ensures  that,  where  a  Member  State  considers  that  a  decision  taken 
under Article 10 (i.e. emergency decisions) or 11 (i.e. settlement of disagreements) of these 
Regulations  impinges  on  its  fiscal  responsibility,  it  may  notify  the  Authority  and  the 
Commission  that  the  national  supervisory  authority  does  not  intend  to  implement  the 
Authority's decision, clearly demonstrating how the decision by the Authority impinges on its 
fiscal responsibilities. Within a period of one month the Authority shall inform the Member 
State  as  to  whether  it  maintains  its  decision  or  whether  it  amends  or  revokes  it.  Where  the 

EN 

8 

   EN 

Authority maintains its decision, the Member State  may  refer the  matter  to the Council and 
the  decision  of  the  Authority  is  suspended.  The  Council  shall,  within  two  months,  decide 
whether  the  decision  should  be  maintained  or  revoked,  acting  by  qualified  majority.  For 
Authority  decisions  adopted  under  Article  10,  an  expedited  procedure  applies  to  take  into 
account the need for rapid decisions in emergency circumstances. 

6.3. 

The internal organisation of the ESAs and the ESFS 

Each  ESA  shall  comprise:  (i)  a  Board  of  Supervisors;  (ii)  a  Management  Board;  (iii)  a 
Chairperson; and (iv) an Executive Director. Moreover, a single Board of Appeal should be 
established for all three ESAs. 

6.3.1.  Board of Supervisors 

The  Board  of  Supervisors  is  the  main  decision  making  body  of  the  ESAs  and  will  among 
other  things  be  responsible  for  the  adoption  of  the  draft  technical  standards,  opinions, 
recommendations,  and  decisions  described  in  section  6.2  of  this  explanatory  memorandum. 
The Board of Supervisors shall be composed of: 

–  the Chairperson of the respective ESA, who will chair the meetings of the Board, but shall 

be non-voting; 

–  the Head of the relevant national supervisory authority in each Member State;  

–  one representative of the Commission who shall be non-voting; 

–  one representative of the ESRB who shall be non-voting; 

–  one representative of each of the other two European Supervisory Authorities who shall be 

non-voting, and 

–  where relevant, the Board may decide to admit observers.  

As a rule, decisions by the Board will be taken by simple majority, except for those decisions 
pertaining the setting of draft technical standards and guidelines and decisions in relation to 
the  articles  on  financial  provisions,  for  which  qualified  majority  voting  will  be  used.  The 
Board may set up panels for dispute settlement. However, the final decision is adopted by the 
Board of Supervisors on proposal from this panel. 

6.3.2.  Management Board 

The Management Board shall ensure that the Authority carries out its mission and performs 
the  tasks  assigned  to  it.  In  particular,  it  should  be  responsible  for  preparing  the  Authority's 
work programme, adopting the rules of procedure, and play a central role in the adoption of 
its budget. It will be composed of the ESA's Chairperson, a representative of the Commission, 
and  four  members  elected  by  the  Board  of  Supervisors  among  its  members,  who  shall  act 
independently  and  objectively  in  the  Community  interest.  The  Executive  Director  may 
participate in meetings of the Management Board without the right to vote. 

EN 

9 

   EN 

6.3.3.  Chairperson and Executive Director 

The  ESA  shall  be  represented  by  a  full-time  independent  Chairperson,  who  shall  be 
responsible for preparing the work of  the Board of Supervisors  as well as  chairing  both  the 
meetings of the Board of Supervisors and the Management Board. The day-to-day activities 
of  the  ESAs  shall  however  be  managed  by  an  Executive  Director,  who,  similarly  to  the 
Chairperson, shall be a full-time independent professional. He or she shall be responsible for 
the implementation of the annual work programme and take the necessary measures to ensure 
the functioning of the ESA. Both persons shall be selected by the Board of Supervisors on the 
basis of merit, skills, knowledge of financial institutions and markets, and experience relevant 
to financial supervision and regulation, following an open selection procedure. The candidate 
selected  by  the  Board  of  Supervisors  for  the  position  of  Chairperson  shall  be  subject  to 
confirmation  by  the  European  Parliament.  The  term  of  both  offices  shall  be  five  years  and 
may  be  extended  once.  Such  extension  would  depend  on  the  outcome  of  an  evaluation 
executed by the Board of Supervisors. 

6.3.4. 

Joint Committee of European Supervisory Authorities 

Within the proposed structure, cross-sectoral cooperation will be fundamental so as to reflect 
the  relevant  market  trends  and  realities.  A  Joint  Committee  of  European  Supervisory 
Authorities  will  ensure  mutual  understanding,  cooperation  and  consistent  supervisory 
approaches  between  the  three  new  ESAs.  A  Subcommittee  to  the  Joint  Committee  shall  be 
established  to  specifically  address  cross-sectoral  issues,  including  financial  conglomerates, 
and ensuring  a  level  playing  field.  While the actual  decisions  on,  for  example  the  Financial 
Conglomerates Directive, are being taken by the individual ESAs, the Joint Committee should 
ensure that common decisions are taken by the ESAs in parallel.  

6.3.5.  Board of Appeal 

An appeal system will ensure that any natural or legal person, including national supervisory 
authorities, may in first instance appeal to a Board of appeal against a decision by the ESAs to 
ensure  the  coherent  application  of  Community  rules  (Article  9),  action  in  emergency 
situations (Article 10), and the settlement of disagreements (Article 11). The Board of Appeal 
shall be a joint body of three ESAs, i.e., it will deal with issues related to banking, insurance 
and securities.  The  Board  of  Appeal  will have six members and  six  alternates with relevant 
knowledge and experience, excluding current staff of the  national supervisory authorities or 
other  national  or  Community  institutions  involved  in  the  activities  of  the  Authority.  Two 
members of the Board  of  Appeal  and two alternates shall be appointed by the Management 
Board of each ESA from a short-list proposed by the European Commission. 

6.4. 

Financial provisions  

These provisions deal with the budgetary aspects of the ESAs and stress that the revenues of 
the  Authorities  may  stem  from  different  sources,  e.g.  obligatory  contributions  from  the 
national supervisory authorities, a subsidy from the Community or fees paid by the industry to 
the 
the  Authority.  It  also  specifies 
implementation  and  control  of  the  budget.  The  Framework  Financial  Regulation  for  bodies 
established under Article 158 of the Financial Regulation shall apply. 

the  annual  establishment, 

the  procedures  for 

EN 

10 

   EN 

6.5. 

General and final provisions 

The  general  provisions  set  out  practical  issues  related  to  staffing,  liability  of  the  ESAs, 
professional  secrecy  obligations,  data  protection,  access 
language 
arrangements, headquarter agreements and participation of third countries. Within three years 
from the effective start of operations and every three years thereafter, the Commission shall 
publish  a  report  on  the  functioning  of  the  ESAs  and  the  procedures  laid  down  in  the 
Regulation.  This  report  will  also  evaluate  progress  achieved  towards  regulatory  and 
supervisory convergence in the fields of crisis management and resolution in the EU. 

to  documents, 

6.6. 

Key differences between the three Regulations 

The  main  differences  between  the  three  proposed  Regulations  concern  the objectives  of  the 
Authorities, the scope of action, and the definitions, which are adapted to the specificities of 
the  relevant  sector  and  existing  Community  legislation.  Moreover,  the  European  Council 
concluded  that  the  ESAs  should  also  have  supervisory  powers  for  credit  rating  agencies. 
ESMA  would  be  responsible  to  register  credit  rating  agencies.  ESMA  would  also  be 
empowered to take supervisory measures such as withdrawing the registration or suspending 
the use for regulatory purposes of credit ratings. Supervisory powers could include the power 
to  request 
inspections.  The 
responsibilities and powers of ESMA with regard to credit rating agencies will be defined in 
an amendment to the Regulation on Credit Rating Agencies. 

investigations  or  on-site 

information  and 

to  conduct 

EN 

11 

   EN 

2009/0143 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a European Insurance and Occupational Pensions Authority 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
95 thereof, 

Having regard to the proposal from the Commission6, 

Having regard to the opinion of the European Economic and Social Committee7, 

Having regard to the opinion of the Committee of the Regions8, 

Having regard to the opinion of the ECB, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty9, 

Whereas: 

(1) 

(2) 

The  financial  crisis  in  2007/2008  exposed  important  shortcomings  in  financial 
supervision, both in particular cases and in relation to the financial system as a whole. 
Nationally-based  supervisory  models  have 
integrated  and 
interconnected  reality  of  European  financial  markets,  in  which  many  financial  firms 
operate  across  borders.  The  crisis  exposed  shortcomings  in  the  area  of  cooperation, 
coordination,  consistent  application  of  Community  law  and  trust  between  national 
supervisors.  

lagged  behind 

the 

A report published on 25 February 2009 by a high-level group of experts chaired by J. 
de Larosière, requested by the Commission, concluded that the supervisory framework 
needed to be strengthened to reduce the risk and severity of future financial crises. It 
recommended  far-reaching  reforms  to  the  structure  of  supervision  of  the  financial 
sector  in  the  Community.  That  group  of  experts  also  concluded  that  a  European 
System  of  Financial  Supervisors  should  be  created,  comprising  three  European 
Supervisory Authorities, one for the insurance and occupational pensions sector, one 
for the banking sector and one for the securities sector, and the creation of a European 
Systemic Risk Council. 

6 
7 
8 
9 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

EN 

12 

   EN 

                                                 
(3) 

(4) 

(5) 

(6) 

The Commission in its Communication of 4 March 2009 entitled "Driving European 
Recovery"10 proposed to bring forward draft legislation creating a European System of 
Financial Supervisors and a European Systemic Risk Board, and in its Communication 
of  27  May  2009  entitled  "European  Financial  Supervision"11  provided  more  detail 
about the possible architecture of such a new supervisory framework. 

The  European  Council,  in  its  conclusions  of  19  June  2009,  recommended  that  a 
European  System  of  Financial  Supervisors,  comprising 
three  new  European 
Supervisory Authorities, be established. The system should be aimed at upgrading the 
quality  and  consistency  of  national  supervision,  strengthening  oversight  of  cross 
border groups and establishing a European single rule book applicable to all financial 
institutions  in  the  Single  Market.  It  emphasised  that  the  European  Supervisory 
Authorities should also have supervisory powers for credit rating agencies and invited 
the  Commission  to  prepare  concrete  proposals  on  how  the  European  System  of 
Financial Supervisors could play a strong role in crisis situations, while stressing that 
decisions  taken  by  the  European  Supervisory  Authorities  should  not  impinge  on  the 
fiscal responsibilities of Member States. 

The financial and economic crisis has created real and serious risks to the stability of 
the internal market. Restoring and maintaining a stable and reliable financial system is 
an absolute prerequisite to preserving trust and coherence in the internal market, hence 
to preserve and improve the conditions for the establishment of a fully integrated and 
functioning  internal  market  in  the  field  of  financial  services.  Moreover,  deeper  and 
more  integrated  financial  markets  offer  better  opportunities  for  financing  and  risk 
diversification,  and  thus  help  to  improve  the  capacity  of  the  economies  to  absorb 
shocks.  

The Community has reached the limits of what can be done with the present status of 
the  Committees  of  European  Supervisors,  which  remain  advisory  bodies  to  the 
Commission.  The  Community  cannot  remain  in  a  situation  where  there  is  no 
mechanism to ensure that national supervisors arrive at the best possible supervisory 
decisions  for  cross-border  institutions;  where  there  is  insufficient  cooperation  and 
information exchange between national supervisory authorities; where joint action by 
national  authorities  requires  complicated  arrangements  to  take  account  of  the 
patchwork  of  regulatory  and  supervisory  requirements;  where  national  solutions  are 
most  often  the  only  feasible  option  in  responding  to  European  problems,  where 
different  interpretations  of  the  same  legal  text  exist.  The  European  System  of 
Supervisors should be designed to overcome these deficiencies and provide a system 
that is in line with the objective of a stable and single Community financial market for 
financial services, linking national supervisors into a strong Community network. 

(7) 

The  European  System  of  Financial  Supervisors  should  be  a  network  of  national  and 
Community  supervisory  authorities,  leaving  day-to-day  supervision  of  financial 
institutions  at  the  national  level,  and  according  a  central  role  in  the  supervision  of 
cross-border groups to colleges of supervisors. Greater harmonisation and the coherent 
application  of  rules  for  financial  institutions  and  markets  across  the  Community 
should also be achieved. A European Insurance and Occupational Pensions Authority 

10 
11 

COM(2009) 114. 
COM(2009) 252. 

EN 

13 

   EN 

                                                 
(8) 

(9) 

should  be  established,  along  with  a  European  Banking  Authority  and  a  European 
Securities and Markets Authority (the European Supervisory Authorities).  

The  European  Supervisory  Authorities  should  replace  the  Committee  of  European 
Banking  Supervisors  established  by  Commission  Decision  2009/78/EC12, 
the 
Committee of European Insurance and Occupational Pensions Supervisors established 
by  Commission  Decision  2009/79/EC13  and  the  Committee  of  European  Securities 
Regulators established by Commission Decision 2009/77/EC14, and assume all of the 
tasks  and  competences  of  those  committees.  The  scope  of  each  Authority's  action 
should be clearly defined. Where institutional reasons and the responsibilities assigned 
in  the  Treaty  so  require,  the  Commission  should  also  be  part  of  the  network  of 
supervisory activities. 

The  European  Insurance  and  Occupational  Pensions  Authority  ("the  Authority") 
should act with a view to improving the functioning of the internal market, including 
in  particular  by  ensuring  a  high,  effective  and  consistent  level  of  regulation  and 
supervision  taking  account  of  the  varying  interests  of  all  Member  States,  to  protect 
policyholders  and  other  beneficiaries,  to  ensure  the  integrity,  efficiency  and  orderly 
functioning of financial markets, to safeguard the stability of the financial system, and 
to strengthen international supervisory coordination, for the benefit of the economy at 
large,  including  financial  institutions  and  other  stakeholders,  consumers  and 
employees. In order to be able to fulfil its objectives, it is necessary and appropriate 
that the Authority should be a Community body having legal personality and it should 
have legal, administrative and financial autonomy. 

(10)  The Court of Justice of the European communities in its judgement of 2 May 2006 in 
(United  Kingdom/European  Parliament  and  Council)15  has 
Case  C-217/04 
acknowledged that Article 95 of the Treaty relating to the adoption of measures for the 
approximation  of  legislation  for  the  establishment  and  functioning  of  the  internal 
market  provides  an  appropriate  legal  basis  for  setting  up  a  "Community  body 
responsible  for  contributing  to  the  implementation  of  a  process  of  harmonisation", 
when the tasks conferred on such a body are closely related to the subject-matter of the 
acts approximating the national legislations. The purpose and tasks of the Authority - 
assisting  national  supervisory  authorities 
interpretation  and 
application  of  Community  rules  and  contributing  to  financial  stability  necessary  for 
financial  integration  -  are  closely  linked  to  the  objectives  of  the  Community  acquis 
concerning the internal market for financial services. The Authority should therefore 
be established on the basis of Article 95 of the Treaty. 

the  consistent 

in 

(11)  The  legal  acts  which  lay  down  the  tasks  for  national  supervisory  authorities  of 
Member States, including cooperating with each other and with the Commission, are 
the  following16:  Directive  64/225/EEC  of  25  February  1964  on  the  abolition  of 

12 
13 
14 
15 
16 

OJ L 24, 29.1.2009, p.23. 
OJ L 25, 29.1.2009, p.28. 
OJ L 25, 29.1.2009, p.18. 
pt. 44 –not yet published.  
Please  note  that  Directives  64/225/EEC,  73/239/EEC,  73/240/EEC,  76/580/EEC,  78/473/EEC, 
84/641/EEC,  87/344/EEC,  88/357/EEC,  1992/49/EEC,  1998/78/EC,  2001/17/EC,  2002/83/EC  and 
2005/68/EC  are  part  of  the  Solvency  II  recast  (Amended  proposal  for  a  directive  of  the  European 
Parliament  and  of  the  Council  on  the  taking-up  and  pursuit  of  the  business  of  Insurance  and 

EN 

14 

   EN 

                                                 
restrictions on freedom of establishment and freedom to provide services in respect of 
reinsurance and retrocession17, First Council Directive 73/239/EEC of 24 July 1973 on 
the  coordination  of  laws,  regulations  and  administrative  provisions  relating  to  the 
taking  up  and  pursuit  of  the  business  of  direct  insurance  other  than  life  assurance18, 
Council Directive 73/240/EEC of 24 July 1973 abolishing restrictions on freedom of 
establishment  in  the  business  of  direct  insurance  other  than  life  assurance19,  Council 
Directive  76/580/EEC  of  29  June  1976  amending  Directive  73/239/EEC  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  the  taking 
up and pursuit of the business of direct insurance other than life assurance20, Council 
Directive  78/473/EEC  of  30  May  1978  on  the  coordination  of  laws,  regulations  and 
administrative  provisions  relating  to  Community  co-insurance21,  Council  Directive 
84/641/EEC of 10 December 1984 amending, particularly as regards tourist assistance, 
the  First  Directive  73/239/EEC  on  the  coordination  of  laws,  regulations  and 
administrative provisions relating to the taking-up and pursuit of the business of direct 
insurance other than life assurance22, Council Directive 87/344/EEC of 22 June 1987 
on the coordination of laws, regulations and administrative provisions relating to legal 
expenses insurance23, Second Council  Directive 88/357/EEC of 22 June 1988 on the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  direct 
insurance  other  than  life  assurance  and  laying  down  provisions  to  facilitate  the 
to  provide  services  and  amending  Directive 
effective  exercise  of  freedom 
73/239/EEC24,  Council  Directive  92/49/EEC  of  18 June  1992  on  the  coordination  of 
laws, regulations and administrative provisions relating to direct insurance other than 
life  assurance  (third  non-life  insurance  Directive)25,  Directive  98/78/EC  of  the 
European  Parliament  and  of  the  Council  of  27 October  1998  on  the  supplementary 
supervision of insurance undertakings in an insurance group26, Directive 2001/17/EC 
of the European Parliament and of the Council of 19 March 2001 on the reorganisation 
and  winding-up  of  insurance  undertakings27,  Directive  2002/83/EC  of  the  European 
Parliament  and  of  the  Council  of  5 November  2002  concerning  life  assurance28, 
Directive 2002/92/EC of the European Parliament and of the Council of 9 December 
2002 on insurance mediation29, and Directive 2003/41/EC of the European Parliament 
and of the Council of 3 June 2003 on the activities and supervision of institutions for 
occupational retirement provision30. 

(12)  Existing  Community  legislation  regulating  the  field  covered  by  this  Regulation  also 
includes  Directive 2002/87/EC  of  the  European  Parliament  and  of  the  Council  of  16 

Reinsurance (recast) (COM(2008) 119 – C6-0231/2007 – 2007/0143(COD)), i.e. will be repealed with 
effect of 1 November 2012. 
OJ 56, 4.4.1964, p. 878.  
OJ L 228, 16.8.1973, p. 3.  
OJ L 228, 16.8.1973, p. 20. 
OJ L 189, 13.7.1976, p. 13. 
OJ L 151, 7.6.1978, p. 25. 
OJ L 339, 27.12.1984, p. 21. 
OJ L 185, 4.7.1987, p. 77. 
OJ L 172, 4.7.1988, p. 1.  
OJ L 228, 11.8.1992, p. 1.  
OJ L 330, 5.12.1998, p. 1.  
OJ L 110, 20.4.2001, p. 28. 
OJ L 345, 19.12.2002, p. 1.  
OJ L 9, 15.1.2003, p. 3. 
OJ L 235, 23.9.2003, p. 10.  

17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 

EN 

15 

   EN 

                                                                                                                                                         
investment  firms 

December  2002  on  the  supplementary  supervision  of  credit  institutions,  insurance 
in  a  financial  conglomerate31,  Directive 
undertakings  and 
2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the 
prevention of the use of the financial system for the purpose of money laundering and 
terrorist financing32, and Directive 2002/65/EC of the European Parliament and of the 
Council  of  23  September  2002  concerning  the  distance  marketing  of  consumer 
financial services33. 

(13)  There is a need to introduce an effective instrument to establish harmonised technical 
standards  in  financial  services  to  ensure,  also  through  a  single  rulebook,  a  level 
playing  field  and  an  adequate  protection  of  policyholders,  other  beneficiaries  and 
consumers  across  Europe.  As  a  body  with  highly  specialised  expertise,  it  is  efficient 
and appropriate to entrust the Authority, in areas defined by Community law, with the 
elaboration  of  draft  technical  standards,  which  do  not  involve  policy  choices.  The 
Commission  should  endorse  those  draft  technical  standards  in  accordance  with 
Community  law  in  order  to  give  them  binding  legal  effect.  The  draft  technical 
standards  have  to  be  adopted  by  the  Commission.  They  would  be  subject  to 
amendment  if,  for  example,  the  draft  technical  standards  were  incompatible  with 
Community  Law,  would  not  respect  the  principle  of  proportionality  or  would  run 
counter  to  the  fundamental  principles  of  the  internal  market  for  financial  services  as 
reflected  in  the  acquis  of  Community  financial  services  legislation.  To  ensure  a 
smooth and expedited adoption process for those standards, the Commission should be 
subject to a time limit for its decision on the endorsement. 

(14)  The  process  for  the  development  of  technical  standards  in  this  regulation  is  without 
prejudice  to  the  Commission's  powers  to  adopt  on  its  own  initiative  implementing 
measures  under  comitology procedures at level 2 of the Lamfalussy structure as laid 
out  in  the  relevant  Community  legislation.  The  matters  concerned  by  the  technical 
standards  do  not  involve  policy  decisions,  and  their  content  is  framed  by  the 
Community  acts  adopted  at  Level  1.  Development  of  the  draft  standards  by  the 
Authority  ensures  that  they  fully  benefit  from  the  specialised  expertise  of  national 
supervisory authorities.  

(15) 

In  areas  not  covered  by  technical  standards,  the  Authority  should  have  the  power  to 
issue non-binding guidelines and recommendations on the application of Community 
legislation.  In  order  to  ensure  transparency  and  strengthen  compliance  by  national 
supervisory  authorities  with 
those  guidelines  and  recommendations,  national 
authorities  should  be  obliged  to  state  their  reasons  where  they  do  not  comply  with 
those guidelines and recommendations. 

(16)  Ensuring the correct and full application of Community law is a core prerequisite for 
the  integrity,  efficiency  and  orderly  functioning  of  financial  markets,  the  stability  of 
the financial system, and for neutral conditions of competition for financial institutions 
in  the  Community.  A  mechanism  should  therefore  be  established  whereby  the 
Authority  addresses  instances  of  incorrect  or  insufficient  application  of  Community 
law. This mechanism should apply in areas where Community legislation defines clear 
and unconditional obligations  

31 
32 
33 

OJ L 35, 11.2.2003, p. 1. 
OJ L 309, 25.11.2005, p. 15. 
OJ L L 271, 9.10.2002, p. 16 

EN 

16 

   EN 

                                                 
(17)  To  allow  for  a  proportionate  response  to  instances  of  incorrect  or  insufficient 
application of Community law, a three-step mechanism should apply. At a first level, 
the  Authority  should  be  empowered  to  investigate  alleged  incorrect  or  insufficient 
application of Community law obligations by national authorities in their supervisory 
practice, concluded by a recommendation.  

(18)  Where  the  national  authority  does  not  comply  with  the  recommendation,  the 
Commission  should be  empowered  to address a Decision to the national supervisory 
authority  concerned  in  order  to  ensure  compliance  with  Community  law,  creating 
direct  legal  effects  which  can  be  invoked  before  national  courts  and  authorities  and 
enforced under Article 226 of the Treaty.  

(19)  To overcome exceptional situations of persistent inaction by the competent authority 
concerned,  the  Authority  should  be  empowered,  as  a  last  resort,  to  adopt  decisions 
addressed  to  individual  financial  institutions.  This  power  should  be  limited  to 
exceptional  circumstances  in  which  a  competent  authority  does  not  comply  with  the 
decisions  addressed  to  it  and  in  which  Community  law  is  directly  applicable  to 
financial institutions by virtue of existing or future EU Regulations. 

(20)  Serious  threats  to  the  orderly  functioning  and  integrity  of  financial  markets  or  the 
stability  of  the  financial  system  in  the  Community  require  a  swift  and  concerted 
response  at  Community  level.  The  Authority  should  therefore  be  able  to  require 
national  supervisory  authorities  to  take  specific  actions  to  remedy  an  emergency 
situation. As the determination of an emergency situation involves a significant degree 
of  discretion,  this  power  should  be  conferred  on  the  Commission.  To  ensure  an 
effective  response  to  the  emergency  situation,  in  the  event  of  inaction  by  national 
supervisory authorities, the Authority should be empowered to adopt, as a last resort, 
decisions  directly  addressed  to  financial  institutions  in  areas  of  Community  law 
directly  applicable  to  them  aimed  at  mitigating  the  effects  of  the  crisis  and  restoring 
confidence in the markets.  

(21) 

In order to ensure efficient and effective supervision and a balanced consideration of 
the  positions  of  the  national  supervisory  authorities  in  different  Member  States,  the 
Authority  should  be  able  to  settle  disagreements  between  those  authorities  with 
binding  effect,  including  within  colleges  of  supervisors.  A  conciliation  phase  should 
be  provided  for,  during  which  the  national  supervisory  authorities  may  reach  an 
agreement.  The  Authority's  competence  should  cover  disagreements  on  procedural 
obligations in the cooperation process as well as on the interpretation and application 
of  Community  law  in  supervisory  decisions.  Existing  conciliation  mechanisms 
provided for in sectoral legislation have to be respected. In the event of inaction by the 
national  supervisory  authorities  concerned,  the  Authority  should  be  empowered  to 
adopt, as a last resort, decisions directly addressed to financial institutions in areas of 
Community law directly applicable to them.  

(22)  Colleges of supervisors play an important role in the efficient, effective and consistent 
supervision  of  financial  institutions  operating  across  borders.  The  Authority  should 
have full participation rights in colleges of supervisors with a view to streamlining the 
functioning  of  and  the  information  exchange  process  in  colleges  and  to  foster 
convergence and consistency across colleges in the application of Community law.  

EN 

17 

   EN 

(23)  The  delegation  of  tasks  and  responsibilities  can  be  a  useful  instrument  in  the 
functioning  of  the  network  of  supervisors  in  order  to  reduce  the  duplication  of 
supervisory tasks, foster cooperation and thereby streamline the supervisory process as 
well  as  reduce  the  burden  imposed  on  financial  institutions.  The  Regulation  should 
therefore  provide  a  clear  legal  basis  for  such  delegation.  Delegation  of  tasks  means 
that  tasks  are  carried  out  by  another  supervisory  authority  instead  of  the  responsible 
authority,  while  the  responsibility  for  supervisory  decisions  remains  with  the 
delegating  authority.  By  delegation  of  responsibilities  one  national  supervisory 
authority, the delegatee, shall be able to decide upon a certain supervisory matter in its 
name  in  lieu  of  another  national  supervisory  authority.  Delegations  should  be 
governed by the principle of allocating supervisory competence to a supervisor which 
is well placed to take action in the subject matter. A reallocation of responsibilities can 
be appropriate for example for reasons of economies of scale or scope, of coherence in 
group  supervision,  and  of  optimal  use  of  technical  expertise  among  national 
supervisory  authorities.  Relevant  Community  legislation  may  further  specify  the 
principles  for  reallocation  of  responsibilities  upon  agreement.  The  Authority  should 
facilitate  delegation  agreements  between  national  supervisory  authorities  by  all 
appropriate  means.  It  should  be  informed  in  advance  of  intended  delegation 
agreements to be able to express an opinion where appropriate. It should centralise the 
publication  of  such  agreements  to  ensure  timely,  transparent  and  easily  accessible 
information about agreements for all parties concerned. 

(24)  The Authority should actively foster supervisory convergence across the Community 

with the aim of establishing a common supervisory culture.  

(25)  Peer  reviews  are  an  efficient  and  effective  tool  for  fostering  consistency  within  the 
network  of  financial  supervisors.  The  Authority  should  therefore  develop  the 
methodological  framework  for  such  reviews  and  conduct  them  on  a  regular  basis. 
Reviews should focus not only on convergence of supervisory practices but also on the 
capacity  of  supervisors  to  achieve  high  quality  supervisory  outcomes  as  well  as  the 
independence of national supervisory authorities. 

(26)  The  Authority  should  actively  promote  a  coordinated  Community  supervisory 
response,  in  particular  where  adverse  developments  could  potentially  jeopardise  the 
orderly functioning and integrity of financial markets or the stability of the financial 
system in the Community. In addition to its powers for action in emergency situations, 
it  should  therefore  be  entrusted  with  a  general  coordination  function  within  the 
European  System  of  Financial  Supervisors.  The  smooth  flow  of  all  relevant 
information  between  national  supervisory  authorities  should  be  a  particular  focus  of 
the Authority's actions. 

(27) 

In  order  to  safeguard  financial  stability  it  is  necessary  to  identify,  at  an  early  stage, 
trends,  potential  risks  and  vulnerabilities  stemming  from  the  micro-prudential  level, 
across  borders  and  across  sectors.  The  Authority  should  monitor  and  assess  such 
developments in the area of its competence and, where necessary, inform the European 
Parliament, the Council, the Commission, the other European Supervisory Authorities 
and the European Systemic Risk Board on a regular and, as necessary, ad hoc basis. 
The  Authority  should  also  coordinate  Community-wide  stress  tests  to  assess  the 
resilience  of  financial  institutions  to  adverse  market  developments,  ensuring  an  as 
consistent as possible methodology is applied at the national level to such tests. 

EN 

18 

   EN 

(28)  Given  the  globalisation  of  financial  services  and  the  increased  importance  of 
international standards, the Authority should foster the dialogue and cooperation with 
supervisors  outside  the  Community.  It  shall  fully  respect  the  existing  roles  and 
competences  of  the  European  Institutions  in  relations  with  authorities  outside  the 
Community and in international forums. 

(29)  The  Authority  should  serve  as  an  independent  advisory  body  to  the  European 
Parliament, the Council, and the Commission in the area of its competence. It should 
be able to provide its opinion on the prudential assessment of mergers and acquisitions 
under  Directive  92/49/EEC,  Directive  2002/83/EC  and  Directive  2005/68/EC,  as 
amended by Directive 2007/44/EC.  

(30) 

In  order  to  effectively  carry  out  its  duties,  the  Authority  should  have  the  right  to 
request  all  necessary  information.  To  avoid  duplication  of  reporting  obligations  for 
financial  institutions,  that  information  should  normally  be  provided  by  the  national 
supervisory authorities who are closest to financial markets and institutions. However, 
the  Authority  should  have  the  power  to  request  information  directly  from  financial 
institutions and other parties where a national supervisory authority does not or cannot 
provide  such  information  in  a  timely  fashion.  Member  States'  authorities  should  be 
obliged to assist the Authority in enforcing such direct requests. 

(31)  Close  cooperation  between  the  Authority  and  the  European  Systemic  Risk  Board  is 
essential  to  give  full  effectiveness  to  the  functioning  of  the  European  Systemic  Risk 
Board and the follow-up to its warnings and recommendations. The Authority should 
share any relevant information with the European Systemic Risk Board. Data related 
to  individual  undertakings  should  be  provided  only  upon  reasoned  request.  Upon 
receipt  of  warnings  or  recommendations  addressed  by  the  European  Systemic  Risk 
Board to the Authority or a national supervisory authority, the Authority should ensure 
follow-up. 

(32)  Where  appropriate,  the  Authority  should  consult  interested  parties  on  technical 
standards,  guidelines  and  recommendations  and  provide  them  with  a  reasonable 
opportunity  to  comment  on  proposed  measures.  For  reasons  of  efficiency,  an 
Insurance, Reinsurance and Occupational Pension Funds Stakeholder Group should be 
established  for  that  purpose,  representing  in  balanced  proportions  Community 
insurance  and  reinsurance  firms  as  well  as  occupational  pension  funds  (including  as 
appropriate  institutional  investors  and  other  financial  institutions  which  themselves 
use  financial  services),  their  employees  and  consumers  and  other  retail  users  of  the 
insurance,  reinsurance  and  occupational  pension  services,  including  SMEs.  The 
Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder  Group  should 
actively  work  as  an  interface  with  other  user  groups  in  the  financial  services  area 
established by the Commission or Community legislation. 

(33)  Member  States  have  a  core  responsibility  in  preserving  financial  stability  in  crisis 
management,  in  particular  with  regard  to  stabilising  and  resolving  individual  ailing 
financial institutions. Measures by the Authority in emergency or settlement situations 
affecting  the  stability  of  a  financial  institution  should  not  impinge  on  the  fiscal 
responsibilities  of  Member  States.  A  mechanism  should  be  established  whereby 
Member States may invoke this safeguard and ultimately bring the matter before the 
Council for a decision. It is appropriate to confer on the Council a role in this matter 
given the particular responsibilities of the Member States in this respect. 

EN 

19 

   EN 

(34) 

In its decision-making procedures, the Authority should be bound by Community rules 
and general principles on due process and transparency. The right to be heard of the 
addressees of the Authority's decisions should be fully respected. The Authority's acts 
form an integral part of Community law. 

(35)  A  Board  of  Supervisors  composed  of  the  heads  of  the  relevant  national  supervisory 
authority  in  each  Member  State,  and  chaired  by  the  Chairperson  of  the  Authority, 
should be the principal decision-making organ of the Authority. Representatives of the 
Commission,  the  European  Systemic  Risk  Board  and  the  other  two  European 
Supervisory  Authorities  should  participate  as  observers.  Members  of  the  Board  of 
Supervisors should act independently and only in the Community's interest. For acts of 
a  general  nature,  including  those  related  to  the  adoption  of  technical  standards, 
guidelines  and  recommendations  as  well  as  budgetary  matters,  it  is  appropriate  to 
apply the rules on qualified majority as laid down in the Treaty, whereas for all other 
decisions simple majority of members should apply. Cases concerning the settlement 
of  disagreements  between  national  supervisory  authorities  should  be  examined  by  a 
restricted panel. 

(36)  A Management Board composed of the Chairperson of the Authority, representatives 
of  national  supervisory  authorities  and  the  Commission  should  ensure  that  the 
Authority  carries  out  its  mission  and  performs  the  tasks  assigned  to  it.  The 
Management  Board  should  be  entrusted  with  the  necessary  powers  to,  inter  alia, 
propose  the  annual  and  multi-annual  work  programme,  exercise  certain  budgetary 
powers, adopt the Authorities staff policy plan, adopt special provisions on the right to 
access to documents and adopt the annual report.  

(37)  A  full  time  Chairperson,  selected  by  the  Board  of  Supervisors  through  an  open 
competition, should represent the Authority. The management of the Authority should 
be  entrusted  to  an  Executive  Director,  who  should  have  the  right  to  participate  in 
meetings of the Board of Supervisors and the Management Board without the right to 
vote. 

(38) 

(39) 

In  order  to  ensure  cross-sectoral  consistency  in  the  activities  of  the  European 
Supervisory  Authorities,  those  authorities  should  coordinate  closely  in  a  Joint 
Committee  of  European  Supervisory  Authorities  and  reach  common  positions  where 
appropriate. The Joint Committee of European Supervisory Authorities should assume 
all  of  the  functions  of  the  Joint  Committee  on  Financial  Conglomerates.  Where 
relevant,  acts  also  falling  within  the  area  of  competence  of  the  European  Banking 
Authority  or  the  European  Securities  and  Markets  Authority  should  be  adopted  in 
parallel by the European Supervisory Authorities concerned. 

It is necessary to ensure that the parties affected by decisions adopted by the Authority 
may  exercise  the  necessary  remedies.  To  effectively  protect  the  rights  of  parties  and 
for reasons of procedural economy, where the Authority has decision-making powers, 
parties  should  be  granted  a  right  of  appeal  to  a  Board  of  Appeal.  For  reasons  of 
efficiency  and  consistency,  the  Board  of  Appeal  should  be  a  joint  body  of  the  three 
European  Supervisory  Authorities,  independent  from  their  administrative  and 
regulatory structures. The decision of the Board of Appeal should be subject to appeal 
before  the  Court  of  First  Instance  and  the  Court  of  Justice  of  the  European 
Communities. 

EN 

20 

   EN 

(40) 

In  order  to  guarantee  its  full  autonomy  and  independence,  the  Authority  should  be 
granted  an  autonomous  budget  with  revenues  mainly  from  obligatory  contributions 
from  national  supervisory  authorities  and  from  the  General  Budget  of  the  European 
Union.  The  Community  budgetary  procedure  should  be  applicable  as  far  as  the 
Community contribution is concerned. The auditing of accounts should be undertaken 
by the Court of Auditors. 

(41)  Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 
May  1999  concerning  investigations  conducted  by  the  European  Anti-Fraud  Office 
(OLAF)34  should  apply  to  the  Authority.  The  Authority  should  also  accede  to  the 
Inter-institutional  Agreement  of  25  May  1999  between  the  European  Parliament,  the 
Council  of  the  European  Union  and  the  Commission  of  the  European  Communities 
concerning internal investigations by the European Anti-Fraud Office (OLAF)35. 

(42) 

In order to ensure open and transparent employment conditions and equal treatment of 
staff,  the  Staff  Regulations  of  Officials  of  the  European  Communities  and  the 
Conditions of Employment of Other Servants of the European Communities36 should 
apply to the staff of the Authority. 

(43) 

It  is  essential  that  business  secrets  and  other  confidential  information  are  protected. 
The  confidentiality  of  information  exchanged  in  the  network  should  likewise  be 
safeguarded. 

(44)  The  protection  of  individuals  with  regard  to  the  processing  of  personal  data  is 
governed by Directive 95/46/EC of the European Parliament and of the Council of 24 
October  1995  on  the  protection  of  individuals  with  regard  to  the  processing  of 
personal  data  and  on  the  free  movement  of  such  data37 and  by  Regulation  (EC)  No 
45/2001 of the European Parliament and of the Council of 18 December 2000 on the 
protection  of  individuals  with  regard  to  the  processing  of  personal  data  by  the 
Community  institutions  and  bodies  and  on  the  free  movement  of  such  data38, 
which are  fully  applicable  to  the  processing  of  personal  data  for  the  purposes  of 
this Regulation. 

(45) 

In  order  to  ensure  the  transparent  operation  of  the  Authority,  Regulation  (EC)  No 
1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding 
public  access  to  European  Parliament,  Council  and  Commission  documents39  should 
apply to the Authority. 

(46)  Countries  which  are  not  members  of  the  European  Union  should  be  allowed  to 
participate in the work of the Authority in accordance with appropriate agreements to 
be concluded by the Community. 

(47)  Since  the  objectives  of  this  Regulation,  namely  improving  the  functioning  of  the 
internal  market  by  means  of  ensuring  a  high,  effective  and  consistent  level  of 
prudential regulation and supervision, protecting policyholders and other beneficiaries, 

34 

35 
36 
37 

38 

39 

OJ L 136, 31.5.1999, p. 1. 
OJ L 136, 31.5.1999, p. 15. 
O.J. L 56, 4.3.1968, p.1. 
OJ L 281, 23.11.1995, p. 31. 
OJ L 8, 12.1.2001, p. 1. 
OJ L 145, 31/5/2001, p. 43. 

EN 

21 

   EN 

                                                 
protecting  the  integrity,  efficiency  and  orderly  functioning  of  financial  markets, 
maintaining  the  stability  of  the  financial  system,  and  strengthening  international 
supervisory  coordination,  cannot  be  sufficiently  achieved  by  the  Member  States  and 
can, therefore, by reason of scale of the action, be better achieved at Community level, 
the Community may adopt measures, in accordance with the principle of subsidiarity 
as  set  out  in  Article  5  of  the  Treaty.  In  accordance  with  the  principle  of 
proportionality, as set out in that Article, this Regulation does not go beyond what is 
necessary in order to achieve those objectives.  

(48)  The  Authority  assumes  all  current  tasks  and  powers  of  the  Committee  of  European 
Insurance  and  Occupational  Pension  Supervisors,  Commission  Decision  2009/79/EC 
of  23  January  2009  establishing  the  Committee  of  European  Insurance  and 
Occupational  Pension  Supervisors  should  therefore  be  repealed,  and  Decision 
…/…/EC  of  the  European  Parliament  and  of  the  Council  establishing  a  Community 
programme  to  support  specific  activities  in  the  field  of  financial  services,  financial 
reporting and auditing, should be amended accordingly. 

(49) 

It  is  appropriate  to  set  a  time  limit  for  the  application  of  this  Regulation  in  order  to 
ensure  that  the  Authority  is  adequately  prepared  to  begin  operations  and  to  ensure  a 
smooth  transition  from  the  Committee  of  European  Insurance  and  Occupational 
Pensions Supervisors. 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 
ESTABLISHMENT AND LEGAL STATUS 

Article 1 
Establishment and Scope of action 

1. 

2. 

3. 

4. 

This  Regulation  establishes  a  European  Insurance  and  Occupational  Pensions 
Authority ("the Authority"). 

The  Authority  shall  act  within  the  scope  of  Directive  64/225/EEC,  Directive 
73/239/EEC,  Directive  73/240/EEC,  Directive  76/580/EEC,  Directive  78/473/EEC, 
Directive  84/641/EEC,  Directive  87/344/EEC,  Directive  88/357/EEC,  Directive 
92/49/EEC,  Directive  98/78/EC,  Directive  2001/17/EC,  Directive  2002/83/EC, 
Directive  2002/92/EC,  Directive  2003/41/EC,  Directive  2002/87/EC,  Directive 
2005/68/EC,  Directive  2007/44/EC,  Directive  2005/60/EC,  Directive  2002/65/EC, 
including  all  directives,  regulations,  and  decisions  based  on  these  acts,  and  of  any 
further Community act which confers tasks on the Authority. 

The  provisions  of  this  Regulation  are  without  prejudice  to  the  powers  of  the 
Commission, in particular under Article 226 of the Treaty to ensure compliance with 
Community law. 

The objective of the Authority shall be to contribute to: (i) improving the functioning 
of the internal market, including in particular a high, effective and consistent level of 
regulation and supervision, (ii) protecting policyholders and other beneficiaries, (iii) 
ensuring  the  integrity,  efficiency  and  orderly  functioning  of  financial  markets,  (iv) 

EN 

22 

   EN 

safeguarding the stability of the financial system, and (v) strengthening international 
supervisory coordination. For this purpose, the Authority shall contribute to ensuring 
the consistent, efficient and effective application of the Community law referred to in 
Article 1(2) above, fostering supervisory convergence and providing opinions to the 
European Parliament, the Council, and the Commission. 

5. 

6. 

The  Authority  shall  form  part  of  a  European  System  of  Financial  Supervisors, 
hereinafter referred to as 'ESFS', which shall function as a network of supervisors, as 
further specified in Article 39. 

The European Insurance and Occupational Pensions Authority shall co-operate with 
the European Systemic Risk Board, hereinafter referred to as 'ESRB' as laid down in 
Article 21 of this Regulation. 

For purposes of this Regulation the following definitions apply: 

Article 2 
Definitions 

(1) 

'financial  institutions'  means  insurance  undertakings  as  defined  in  Directive 
98/78/EC,  reinsurance  undertakings  as  defined  in  Directive  2005/68/EC  and 
institutions  for  occupational  retirement  provision  covered  by  Directive 
2003/41/EC, and 'financial conglomerates' as defined in Directive 2002/87/EC; 

(2) 

'national  supervisory  authorities'  means  national  authorities  which  are 
empowered  by  law  or  regulation  to  supervise  insurance  or  reinsurance 
undertakings or institutions for occupational retirement provision. 

Article 3 
Legal status 

1. 

2. 

The Authority shall be a Community body with legal personality. 

In  each  Member  State,  the  Authority  shall  enjoy  the  most  extensive  legal  capacity 
accorded to legal persons under national law. It may, in particular, acquire or dispose 
of movable and immovable property and be a party to legal proceedings. 

3. 

The Authority shall be represented by its Chairperson. 

The Authority shall comprise the following: 

Article 4 
Composition 

(1) 

a Board of Supervisors, which shall exercise the tasks set out in Article 28; 

(2) 

a Management Board, which shall exercise the tasks set out in Article 32; 

(3) 

a Chairperson, who shall exercise the tasks set out in Article 33; 

EN 

23 

   EN 

(4) 

an Executive Director, who shall exercise the tasks set out in Article 38; 

(5) 

a Board of Appeal, as referred to in Article 44,which shall exercise the tasks set 
out in Article 46. 

The Authority shall have its seat in Frankfurt.  

Article 5 
Seat 

CHAPTER II 
TASKS AND POWERS OF THE AUTHORITY 

Article 6 
Tasks and Powers of the Authority 

1. 

The Authority shall have the following tasks: 

(a) 

(b) 

(c) 

(d) 

contribute  to  the  establishment  of  high  quality  common  regulatory  and 
supervisory standards and practices, in particular by providing opinions to the 
Community  institutions  and  by  developing  guidelines,  recommendations,  and 
draft technical standards which shall be based on the legislation referred to in 
Article 1(2); 

contribute to a consistent application of Community legislation, in particular by 
contributing  to  a  common  supervisory  culture,  ensuring  consistent,  efficient 
and  effective  application  of  the  legislation  referred  to  in  Article  1(2), 
preventing regulatory arbitrage, mediating and settling disagreements between 
national supervisory authorities, promoting a coherent functioning of colleges 
of supervisors and taking actions in emergency situations; 

facilitate  the  delegation  of  tasks  and  responsibilities  between  national 
supervisory authorities; 

cooperate closely with the ESRB, in particular by providing the ESRB with the 
necessary information for the achievement of its tasks and by ensuring a proper 
follow up to the warnings and recommendations of the ESRB; 

(e) 

conduct peer review analysis of national supervisory authorities, to strengthen 
consistency in supervisory outcomes; 

(f)  monitor and assess market developments in the area of its competence; 

(g) 

fulfil  any  other  specific  tasks  set  out  in  this  Regulation  or  in  the  Community 
legislation referred to in Article 1(2). 

2. 

To achieve the tasks set out in paragraph 1, the Authority shall have the powers set 
out in this Regulation, in particular the power to: 

(a) 

develop draft technical standards in the specific cases referred to in Article 7; 

EN 

24 

   EN 

(b) 

issue guidelines and recommendations, as laid down in Article 8; 

(c) 

issue recommendations in specific cases, as referred to in Article 9(3);  

(d) 

(e) 

(f) 

take  individual  decisions  addressed  to  national  supervisory  authorities  in  the 
specific cases referred to in Article 10 and 11; 

take  individual  decisions  addressed  to  financial  institutions,  in  the  specific 
cases referred to in Article 9(6), Article 10(3), and Article 11(4); 

issue opinions to the European Parliament, the Council, or the Commission as 
provided in Article 19. 

3. 

The  Authority  shall  execute  any  exclusive  supervisory  powers  over  entities  with 
Community-wide reach or economic activities with Community-wide reach entrusted 
to it in the legislation referred to in Article 1(2).  

For  that  purpose,  the  Authority  shall  have  appropriate  powers  of  investigation  and 
enforcement  as  specified  in  the  relevant  legislation,  as  well  as  the  possibility  of 
charging fees.  

Article 7 
Technical standards 

1. 

The Authority may develop technical standards in the areas specifically set out in the 
legislation referred to in Article 1(2). The Authority shall submit its draft standards 
to the Commission for endorsement.  

Before submitting them to the Commission, the Authority shall, where appropriate, 
conduct  open  public  consultations  on  technical  standards  and  analyse  the  potential 
related costs and benefits.  

Within  three  months  of  receipt  of  the  draft  standards,  the  Commission  shall  decide 
whether to endorse the draft standards. The Commission may extend that period by 
one  month.  The  Commission  may  endorse  the  draft  standards  only  in  part  or  with 
amendments where the Community interest so requires.  

Where  the  Commission  does  not  endorse  the  standards  or  endorses  them  in  part  or 
with amendments, it shall inform the Authority of its reasons.  

2. 

The  standards  shall  be  adopted  by  the  Commission  by  means  of  Regulations  or 
Decisions and published in the Official Journal of the European Union. 

Article 8  
Guidelines and recommendations 

The Authority shall, with a view to establishing consistent, efficient and effective supervisory 
practices within the ESFS, and to ensuring the common, uniform and consistent application of 
Community  legislation,  issue  guidelines  and  recommendations  addressed  to  national 
supervisory authorities or financial institutions.  

EN 

25 

   EN 

The national supervisory authorities shall make every effort to comply with those guidelines 
and recommendations.  

Where the national supervisory authority does not apply those guidelines or recommendations 
it shall inform the Authority of its reasons. 

1. 

2. 

3. 

4. 

Article 9 
Consistent application of Community rules  

Where  a  national  supervisory  authority  has  not  correctly  applied  the  legislation 
referred to in Article 1(2), in particular by failing to ensure that a financial institution 
satisfies the requirements laid down in that legislation, the Authority shall have the 
powers set out in paragraphs 2, 3 and 6 of this Article.  

Upon  request  from  one  or  more  national  supervisory  authorities,  from  the 
Commission  or  on  its  own  initiative  and  after  having  informed  the  national 
supervisory authority concerned, the Authority may investigate the alleged incorrect 
application of Community law. 

Without  prejudice  to  the  powers  laid  down  in  Article  20,  the  national  supervisory 
authority  shall  provide  the  Authority  with  all  information  which  the  Authority 
considers necessary for its investigation without delay. 

The Authority may, at the latest within two months from initiating its investigation, 
address to the national supervisory authority concerned a recommendation setting out 
the action necessary to comply with Community law. 

The national supervisory authority shall, within ten working days of the receipt of the 
recommendation, inform the Authority of the steps it has taken or intends to take to 
ensure compliance with Community law.  

Where  the  national  supervisory  authority  has  not  complied  with  Community  law 
within one month from receipt of the Authority's recommendation, the Commission 
may,  after  having  been  informed  by  the  Authority  or  on  its  own  initiative,  take  a 
decision requiring the national supervisory authority to take the action necessary to 
comply with Community law. 

The  Commission  shall  take  such  a  decision  no  later  than  three  months  from  the 
adoption  of  the  recommendation.  The  Commission  may  extend  this  period  by  one 
month. 

The  Commission  shall  ensure  that  the  right  to  be  heard  of  the  addressees  of  the 
decision is respected. 

The Authority and the national supervisory authorities shall provide the Commission 
with all necessary information.  

5. 

The  national  supervisory  authority  shall,  within  ten  working  days  of  receipt  of  the 
decision referred to in paragraph 4, inform the Commission and the Authority of the 
steps it has taken or intends to take to implement the Commission's decision. 

EN 

26 

   EN 

6. 

Without prejudice to the powers of the Commission under Article 226 of the Treaty, 
where a national supervisory authority does not comply with the decision referred to 
in paragraph 4 of this Article within the period of time specified therein, and where it 
is  necessary  to  remedy  in  a  timely  manner  the  non  compliance  by  the  national 
supervisory  authority  in  order  to  maintain  or  restore  neutral  conditions  of 
competition  in  the  market  or  ensure  the  orderly  functioning  and  integrity  of  the 
financial  system,  the  Authority  may,  where  the  relevant  requirements  of  the 
legislation referred to in Article 1(2) are directly applicable to financial institutions, 
adopt  an  individual  decision  addressed  to  a  financial  institution  requiring  the 
necessary action to comply with its obligations under Community law including the 
cessation of any practice. 

The decision of the Authority shall be in conformity with the decision adopted by the 
Commission pursuant to paragraph 4.  

7. 

Decisions  adopted  under  paragraph  6  shall  prevail  over  any  previous  decision 
adopted by the national supervisory authorities on the same matter. 

Any  action  by  the  national  supervisory  authorities  in  relation  to  facts  which  are 
subject  to  a  decision  pursuant  to  paragraph  4  or  6  shall  be  compatible  with  those 
decisions. 

Article 10 
Action in emergency situations 

1. 

2. 

3. 

In  the  case  of  adverse  developments  which  may  seriously  jeopardise  the  orderly 
functioning and integrity of financial markets or the stability of the whole or part of 
the financial system in the Community, the Commission, upon its own initiative or 
following a request by the Authority, the Council, or the ESRB, may adopt a decision 
addressed to the Authority, determining the existence of an emergency situation for 
the purposes of this regulation. 

Where  the  Commission  has  adopted  a  decision  pursuant  to  paragraph  1,  the 
Authority  may  adopt  individual  decisions  requiring  national  supervisory  authorities 
to take the necessary action in accordance with the legislation referred to in Article 
1(2) to address any risks that may jeopardise the orderly functioning and integrity of 
financial  markets  or  the  stability  of  the  whole  or  part  of  the  financial  system  by 
ensuring  that  financial  institutions  and  national  supervisory  authorities  satisfy  the 
requirements laid down in that legislation. 

Without prejudice to the powers of the Commission under Article 226 of the Treaty, 
where  a  national  supervisory  authority  does  not  comply  with  the  decision  of  the 
Authority  referred  to  in  paragraph  2  within  the  period  laid  down  therein,  the 
Authority may, where the relevant requirements laid down in the legislation referred 
to in Article 1(2) are directly applicable to financial institutions, adopt an individual 
decision addressed to a financial institution requiring the necessary action to comply 
with its obligations under that legislation, including the cessation of any practice. 

4. 

Decisions  adopted  under  paragraph  3  shall  prevail  over  any  previous  decision 
adopted by the national supervisory authorities on the same matter. 

EN 

27 

   EN 

Any  action  by  the  national  supervisory  authorities  in  relation  to  facts  which  are 
subject  to  a  decision  pursuant  to  paragraph  2  or  3  shall  be  compatible  with  those 
decisions. 

Article 11 
Settlement of disagreements between national supervisory authorities 

Without prejudice to the powers laid down in Article 9, where a national supervisory 
authority  disagrees  on  the  procedure  or  content  of  an  action  or  inaction  by  another 
national  supervisory  authority  in  areas  where  the  legislation  referred  to  in  Article 
1(2)  requires  cooperation,  coordination  or  joint  decision  making  by  national 
supervisory  authorities  from  more  than  one  Member  State,  the  Authority,  at  the 
request of one or more of the national supervisory authorities concerned, may assist 
the authorities in reaching an agreement in accordance with the procedure set out in 
paragraph 2. 

The Authority shall set a time limit for conciliation between the national supervisory 
authorities taking into account any relevant time periods specified in the legislation 
referred to in Article 1(2) and the complexity and urgency of the matter.  

If, at the end of the conciliation phase, the national supervisory authorities concerned 
have failed to reach an agreement, the Authority may take a decision requiring them 
to  take  specific  action  or  to  refrain  from  action  in  order  to  settle  the  matter,  in 
compliance with Community law.  

Without prejudice to the powers of the Commission under Article 226 of the Treaty, 
where  a  national  supervisory  authority  does  not  comply  with  the  decision  of  the 
Authority,  and  thereby  fails  to  ensure  that  a  financial  institution  complies  with 
requirements directly applicable to it by virtue of the legislation referred to in Article 
1(2),  the  Authority  may  adopt  an  individual  decision  addressed  to  a  financial 
institution  requiring  the  necessary  action  to  comply  with  its  obligations  under 
Community law, including the cessation of any practice.  

Article 12 
Colleges of supervisors 

The Authority shall contribute to promote the efficient and consistent functioning of 
colleges  of  supervisors  and  foster  the  coherence  of  the  application  of  Community 
legislation across colleges. 

The Authority shall participate as an observer in colleges of supervisors as it deems 
appropriate.  For  the  purpose  of  that  participation,  it  shall  be  considered  a  'national 
supervisory  authority'  within  the  meaning  of  the  relevant  legislation  and,  at  its 
request, shall receive all relevant information shared with any member of the college.  

The  Authority  shall,  in  cooperation  with  the  supervisors  operating  in  colleges  of 
supervisors,  determine  and  collect  as  appropriate  all  relevant  information  from 
national supervisory authorities, in order to facilitate the work of those colleges. 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

EN 

28 

   EN 

It shall establish and manage a central system to make such information accessible to 
the national supervisory authorities in colleges of supervisors.  

Article 13 
Delegation of tasks and responsibilities 

1. 

2. 

3. 

National  supervisory  authorities  may,  by  bilateral  agreement,  delegate  tasks  and 
responsibilities to other national supervisory authorities.  

The  Authority  shall  facilitate  the  delegation  of  tasks  and  responsibilities  between 
national  supervisory  authorities  by  identifying  those  tasks  and  responsibilities  that 
can be delegated or jointly exercised and by promoting best practices.  

National supervisory authorities shall inform the Authority of delegation agreements 
they intend to enter into. They shall put the agreements into effect at the earliest one 
month after informing the Authority.  

The Authority may give an opinion on the intended agreement within one month of 
being informed.  

The Authority shall publish any delegation agreement as concluded  by the national 
supervisory  authorities  by  appropriate  means,  in  order  to  ensure  that  all  parties 
concerned are informed appropriately.  

Article 14 
Common supervisory culture 

1. 

The Authority shall play an active role in building a common European supervisory 
culture  and  consistent  supervisory  practices,  and  ensuring  uniform  procedures  and 
consistent approaches throughout the Community and shall carry out, at a minimum, 
the following activities: 

(a) 

provide opinions to national supervisory authorities; 

(b)  promote  an  effective  bilateral  and  multilateral  exchange  of  information 
between  national  supervisory  authorities,  with  full  respect  of  the  applicable 
confidentiality  and  data  protection  provisions  provided  for  in  the  relevant 
Community legislation; 

(c) 

(d) 

(e) 

contribute  to  developing  high  quality  and  uniform  supervisory  standards, 
including reporting standards; 

review  the  application  of  the  relevant  technical  standards  adopted  by  the 
Commission,  guidelines  and  recommendations  issued  by  the  Authority  and 
propose amendments where appropriate; 

establish  sectoral  and  cross-sectoral  training  programmes,  facilitate  personnel 
exchanges  and  encourage  national  supervisory  authorities  to  intensify  the  use 
of secondment schemes and other tools.  

EN 

29 

   EN 

2. 

1. 

The  Authority  may,  as  appropriate,  develop  new  practical  instruments  and 
convergence tools to promote common supervisory approaches and practices.  

Article 15 
Peer review of national supervisory authorities 

The Authority shall periodically conduct peer review analyses of some or all of the 
activities  of  national  supervisory  authorities,  to  further  enhance  consistency  in 
supervisory outcomes. To this end, the Authority shall develop methods to allow for 
objective assessment and comparison between the authorities reviewed. 

2. 

The peer review shall include an assessment of, but not be limited to: 

(a) 

(b) 

the adequacy of institutional arrangements, resourcing and staff expertise of the 
national  supervisory  authority,  with  particular  regard 
the  effective 
application of the legislation referred to in Article 1(2) and to the capacity to 
respond to market developments; 

to 

the degree of convergence reached in the application of Community law and in 
and 
supervisory  practice, 
recommendations adopted under Articles 7 and 8, and the extent to which the 
supervisory practice achieves the objectives set out in Community law; 

standards,  guidelines 

including 

technical 

(c) 

good  practices  developed  by  some  national  supervisory  authorities  which 
might be of benefit for other national supervisory authorities to adopt. 

3. 

On  the  basis  of  the  peer  review  the  Authority  may  issue  recommendations  to  the 
national supervisory authorities concerned. 

Article 16 
Coordination function  

The Authority shall fulfil a general coordination role between national supervisory authorities, 
including  where  adverse  developments  could  potentially  jeopardise  the  orderly  functioning 
and integrity of financial markets or the stability of the financial system in the Community. 

The Authority shall promote a coordinated Community response, inter alia by: 

(1) 

facilitating  the  exchange  of  information  between  the  national  supervisory 
authorities; 

(2)  determining  the  scope  and  verifying  the  reliability  of  information  that  should 

be made available to all national supervisory authorities concerned;  

(3)  without  prejudice  to  Article  11,  acting  as  mediator  on  the  request  of  national 

supervisory authorities or on its own initiative; 

(4)  notifying the ESRB of any potential emergency situations without delay. 

EN 

30 

   EN 

1. 

2. 

3. 

Article 17 
Assessment of market developments 

The  Authority  shall  monitor  and  assess  market  developments  in  the  area  of  its 
competence  and,  where  necessary,  inform  the  European  Banking  Authority,  the 
European Securities and Markets Authority, the ESRB, the European Parliament, the 
Council  and  the  Commission  about  the  relevant  micro-prudential  trends,  potential 
risks and vulnerabilities. 

In  particular,  the  Authority  shall,  in  cooperation  with  the  ESRB,  initiate  and 
coordinate Community-wide assessments of the resilience of financial institutions to 
adverse  market  developments.  To  that  end,  it  shall  develop  the  following,  for 
application by the national supervisory authorities: 

(a) 

(b) 

common  methodologies  for  assessing  the  effect  of  economic  scenarios  on  an 
institution's financial positions;  

common approaches to communication on the outcomes of these assessments 
of the resilience of financial institutions. 

Without  prejudice  to  the  tasks  of  the  ESRB  set  out  in  Regulation  (EC)  No  …/… 
[ESRB], the Authority shall, at least once a year, and more frequently as necessary, 
provide  assessments  to  the  European  Parliament,  the  Council,  the  Commission  and 
the ESRB of trends, potential risks and vulnerabilities in the area of its competence. 

The  Authority  shall  include  a  classification  of  the  main  risks  and  vulnerabilities  in 
these  assessments  and,  where  necessary,  recommend  preventative  or  remedial 
actions.  

The  Authority  shall  ensure  an  adequate  coverage  of  cross-sectoral  developments, 
risks and vulnerabilities by closely cooperating with the European Banking Authority 
and the European Securities and Markets Authority. 

Article 18 
International relations 

Without  prejudice  to  the  competences  of  the  Community  Institutions,  the  Authority  may 
develop  contacts  with  supervisory  authorities  from  third  countries.  It  may  enter  into 
administrative arrangements with international organisations and the administrations of third 
countries. 

The  Authority  shall  assist  in  preparing  equivalence  decisions  pertaining  to  supervisory 
regimes in third countries in accordance with the legislation referred to in Article 1(2). 

Article 19 
Other tasks 

1. 

The Authority may, upon a request from the European Parliament, the Council, the 
Commission or on its own initiative provide opinions to the European Parliament, the 
Council and the Commission on all issues related to its area of competence. 

EN 

31 

   EN 

2. 

1. 

2. 

3. 

1. 

2 

3. 

4. 

With regard to prudential assessments of mergers and acquisitions falling under the 
terms  of  Directive  2007/44/EC,  the  Authority  may,  on  its  own  initiative  or  on 
application of any national supervisory authorities, issue and publish an opinion on a 
prudential assessment to be carried out by any authority of a Member State. Article 
20 shall apply.  

Article 20 
Collection of information  

At  the  request  of  the  Authority,  national  supervisory  authorities  and  other  public 
authorities  of  the  Member  States  shall  provide  the  Authority  with  all  the  necessary 
information to carry out the duties assigned to it by this Regulation. 

The Authority may also request information to be provided at recurring intervals. 

Where information is not available or is not made available in a timely fashion by the 
national  supervisory  authorities  and  other  public  authorities  of  the  Member  States, 
the  Authority  may  address  a  reasoned  request  directly  to  relevant  financial 
institutions  and  other  parties.  It  shall  inform  the  relevant  national  supervisory 
authorities of such requests. 

At the request of the Authority, the national supervisory authorities and other public 
authorities  of  the  Member  States  shall  assist  the  Authority  in  collecting  such 
information. 

The Authority may use confidential information received from national supervisory 
authorities and other public authorities or from financial institutions and other parties 
only for the purposes of carrying out the duties assigned to it by this Regulation.  

Article 21 
Relationship with the ESRB 

The European Insurance and Occupational Pensions Authority shall co-operate with 
the ESRB. 

The Authority shall cooperate closely with the ESRB. It shall provide the ESRB with 
regular  and  up-to-date  information  necessary  for  the  achievement  of  its  tasks.  Any 
data necessary for the achievement of its tasks that are not in summary or collective 
form  shall  be  provided  without  delay  to  the  ESRB  upon  a  reasoned  request,  as 
specified in Article [15] of Regulation (EC) No …./… [ESRB]. 

The Authority shall, in accordance with paragraphs 4 and 5, ensure a proper follow-
up to ESRB warnings and recommendations referred to in Article [16] of Regulation 
(EC) No …/… [ESRB].  

On  receipt  of  a  warning  or  recommendation  from  the  ESRB  addressed  to  the 
Authority, it shall convene a meeting of the Board of Supervisors without delay and 
assess the implications of such a warning or recommendation for the fulfilment of its 
tasks.  

EN 

32 

   EN 

It shall decide, by the relevant decision-making procedure, on the actions to be taken 
in  accordance  with  the  powers  conferred  upon  it  by  this  Regulation  for  addressing 
the issues identified in the warnings and recommendations.  

If  the  Authority  does  not  act  further  to  a  recommendation,  it  shall  explain  to  the 
ESRB its reasons for not doing so. 

5. 

On receipt of a warning or recommendation from the ESRB addressed to a national 
supervisory authority, the Authority shall, where relevant, use the powers conferred 
upon it by this Regulation to ensure a timely follow-up.  

6. 

1. 

2. 

3. 

Where the addressee intends not to follow the recommendation of the ESRB, it shall 
inform and discuss with the Board of Supervisors its reasons for not acting.  

The national supervisory authority shall take due account of the views of the Board 
of  Supervisors  when  informing  the  ESRB  in  accordance  with  Article  [17]  of 
Regulation (EC) no …/… [ESRB]. 

In discharging its tasks set out in this regulation, the Authority shall take the utmost 
account of the warnings and recommendations of the ESRB. 

Article 22 
Insurance, Reinsurance and Occupational Pensions Stakeholder Group  

For the purpose of consultation with stakeholders in areas relevant to the tasks of the 
Authority,  an  Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder 
Group shall be established. 

The  Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder  Group 
shall be composed of 30 members, representing in balanced proportions Community 
insurance  and  reinsurance  firms  as  well  as  occupational  pension  funds,  their 
employees  as  well  as  consumers  and  users  of  the  insurance,  reinsurance  and 
occupational pension services. 

The  Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder  Group 
shall meet at least twice a year. 

The  members  of  the  Insurance,  Reinsurance  and  Occupational  Pension  Funds 
Stakeholder Group shall be appointed by the Board of Supervisors of the Authority, 
following proposals from the relevant stakeholders. 

In making its decision, the Board of Supervisors shall, to the extent possible, ensure 
an  appropriate  geographical  balance  and  representation  of  stakeholders  across  the 
Community. 

The  Authority  shall  ensure  adequate  secretarial  support  for  the  Insurance, 
Reinsurance and Occupational Pension Funds Stakeholder Group. 

4. 

Members  of 
the  Insurance,  Reinsurance  and  Occupational  Pension  Funds 
Stakeholder Group shall serve for a period of two and a half years, following which a 
new selection procedure shall take place. 

EN 

33 

   EN 

5. 

6. 

7. 

1. 

2. 

The members may serve two successive terms.  

The  Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder  Group 
may submit opinions and advice to the Authority on any issue related to the tasks of 
the Authority specified in Articles 7 and 8. 

The  Insurance,  Reinsurance  and  Occupational  Pension  Funds  Stakeholder  Group 
shall adopt its rules of procedure 

The  Authority  shall  make  public  the  opinions  and  advice  of  the  Insurance, 
Reinsurance  and Occupational Pension  Funds Stakeholder Group and the results of 
its consultations.  

Article 23 
Safeguards 

The Authority shall ensure that no decision adopted under Articles 10 or 11 impinges 
in any way on the fiscal responsibilities of Member States.  

Where a Member State considers that a decision taken under Article 11 impinges on 
its fiscal responsibilities, it may notify the Authority and the Commission within one 
month  after  notification  of  the  Authority's  decision  to  the  national  supervisory 
authority  that  the  decision  will  not  be  implemented  by  the  national  supervisory 
authority. 

In its notification, the Member State shall justify why and clearly demonstrate how 
the decision impinges on its fiscal responsibilities. 

In that case, the decision of the Authority shall be suspended. 

Within  a  period  of  one  month  from  the  notification  by  the  Member  State,  the 
Authority  shall  inform  the  Member  State  as  to  whether  it  maintains  its  decision  or 
whether it amends or revokes it.  

Where the Authority maintains its decision, the Council, acting by qualified majority 
as defined in Article 205 of the Treaty, shall, within two months, decide whether the 
Authority's decision is maintained or revoked. 

Where the Council decides to maintain the Authority's decision, or where it does not 
take  a  decision  within  two  months,  the  suspension  of  that  decision  shall  be 
immediately terminated.  

3. 

Where a Member State considers that a decision taken under Article 10(2) impinges 
on  its  fiscal  responsibilities,  it  may  notify  the  Authority,  the  Commission  and  the 
Council within three working days after notification of the Authority's decision to the 
national  supervisory  authority  that  the  decision  will  not  be  implemented  by  the 
national supervisory authority. 

In its notification, the Member State shall justify why and clearly demonstrate how 
the decision impinges on its fiscal responsibilities. 

EN 

34 

   EN 

The  Council,  acting  by  qualified  majority  as  defined  in  Article  205  of  the  Treaty, 
shall, within ten working days, decide whether the Authority's decision is maintained 
or revoked. 

Where the Council does not take a decision within ten working days, the Authority's 
decision shall be deemed to be maintained. 

Article 24 
Decision-making procedures 

1. 

2. 

3. 

4. 

5. 

Before  taking  the  decisions  provided  for  in  Article  9(6),  Article  10(2)  and(3)  and 
Article  11(3)  and  (4),  the  Authority  shall  inform  the  addressee  of  its  intention  to 
adopt  the  decision,  setting  a  time  limit  within  which  the  addressee  may  express  its 
views on the matter, taking full account of the urgency of the matter.  

The decisions of the Authority shall state the reasons on which they are based. 

The addressees of decisions of the Authority shall be informed of the legal remedies 
available under this Regulation. 

Where  the  Authority  has  taken  a  decision  pursuant  to  Article  10(2)  or  (3),  it  shall 
review that decision at appropriate intervals.  

The  decisions  which  the  Authority  takes  pursuant  to  Articles  9,  10  and  11  shall  be 
made  public  and  shall  state  the  identity  of  the  national  supervisory  authority  or 
financial institution concerned and the main content of the decision, having regard to 
the  legitimate  interest  of  financial  institutions  in  the  protection  of  their  business 
secrets.  

CHAPTER III 
ORGANISATION 

SECTION 1 
BOARD OF SUPERVISORS  

Article 25 
Composition 

1. 

The Board of Supervisors shall be composed of: 

(a) 

the Chairperson, who shall be non-voting; 

(b) 

the  Head  of  the  relevant  national  supervisory  authority  competent  for  the 
supervision of financial institutions in each Member State. If there is more than 
one competent authority in a Member State, the authorities shall agree on one 
of the Heads to be the representative on the Board of Supervisors;  

(c) 

one representative of the Commission who shall be non-voting; 

EN 

35 

   EN 

(d)  one representative of the ESRB who shall be non-voting; 

(f) 

one representative of each of the other two European Supervisory Authorities 
who shall be non-voting. 

2. 

Each national supervisory authority, and if there is more than one relevant national 
supervisory authority, those authorities together, shall be responsible for nominating 
a high-level alternate from its authority or authorities, who may replace the member 
of  the  Board  of  Supervisors  referred  to  in  paragraph  1(b),  in  case  this  person  is 
prevented from attending.  

3. 

The Board of Supervisors may decide to admit observers. 

The  Executive  Director  may  participate  in  meetings  of  the  Board  of  Supervisors 
without the right to vote. 

Article 26 
Internal committees and Panels 

1. 

2. 

The  Board  of  Supervisors  may  establish  internal  committees  or  panels  for  specific 
tasks  attributed  to the Board of Supervisors,  and  may  provide  for  the  delegation  of 
certain  clearly  defined  tasks  and  decisions  to  internal  committees  or  panels,  to  the 
Management Board or to the Chairperson. 

For  the  purposes  of  Article  11,  the  Board  of  Supervisors  shall  convoke  a  panel  to 
facilitate the settlement of the disagreement, consisting of the Chairperson and two of 
its  members,  who  are  not  representatives  of  the  national  supervisory  authorities 
which are parties to the disagreement. 

A Decision pursuant to Article 11 shall be adopted by the Board of Supervisors on 
proposal from the panel. 

Article 27 
Independence 

When  carrying  out  the  tasks  conferred  upon  it  by  this  Regulation,  the  Chairperson  and  the 
voting  members  of  the  Board  of  Supervisors  shall  act  independently  and  objectively  in  the 
Community interest and shall neither seek nor take instructions from Community institutions 
or bodies, from a Government of a Member State or from any other public or private body. 

Article 28 
Tasks  

1. 

2. 

3. 

The Board of Supervisors shall give guidance to the work of the Authority and shall 
be in charge of taking the decisions referred to in Chapter II. 

The Board of Supervisors shall adopt the opinions, recommendations, and decisions, 
and issue the advice referred to in Chapter II. 

The Board of Supervisors shall appoint the Chairperson.  

EN 

36 

   EN 

4. 

5. 

6. 

7. 

1. 

2. 

3. 

4. 

The Board of Supervisors shall adopt, before 30 September each year, on the basis of 
a proposal by the Management Board, the work programme of the Authority for the 
coming  year,  and  shall  transmit  it  for  information  to  the  European  Parliament,  the 
Council and the Commission. 

The  work  programme  shall  be  adopted  without  prejudice  to  the  annual  budgetary 
procedure and shall be made public. 

The  Board  of  Supervisors  shall  adopt  the  multi-annual  work  programme  of  the 
Authority,  and  shall  transmit  it  for  information  to  the  European  Parliament,  the 
Council and the Commission. 

The multi-annual work programme shall be adopted without prejudice to the annual 
budgetary procedure and shall be made public. 

The Board of Supervisors shall approve the draft budget in accordance with Article 
49. 

The Board of Supervisors shall exercise disciplinary authority over the Chairperson 
and  the  Executive  Director  and  may  remove  them  from  office  in  accordance  with 
Article 33(5) or Article 36(5) respectively. 

Article 29 
Decision making 

The Board of Supervisors shall act on the basis of qualified majority of its members, 
as  defined  in  Article  205  of  the  Treaty,  for  acts  specified  in  Articles  7,  8  and  all 
measures and decisions adopted under Chapter VI.  

All other decisions of the Board of Supervisors shall be taken by simple majority of 
members.  

Meetings of the Board of Supervisors shall be convened by the Chairperson at his or 
her own initiative or at the request of one third of its members, and shall be chaired 
by the Chairperson. 

The Board of Supervisors shall adopt and make public its rules of procedure. 

The  rules  of  procedure  shall  set  out  in  detail  the  arrangements  governing  voting, 
including, where appropriate, the rules governing quorums. The non-voting members 
and the observers, with the exception of the Chairperson and the Executive Director, 
shall  not  attend  any  discussions  within  the  Board  of  Supervisors  relating  to 
individual financial institutions, unless otherwise provided for in Article 61 or in the 
legislation referred to in Article 1(2). 

EN 

37 

   EN 

 
SECTION 2 
MANAGEMENT BOARD 

Article 30 
Composition  

1. 

The  Management  Board  shall  be  composed  of  the  Chairperson,  a  representative  of 
the Commission, and four members elected by the Board of Supervisors from among 
its members.  

Each  member  other  than  the  Chairperson  shall  have  an  alternate,  who  may  replace 
the member of the Management Board if that person is prevented from attending.  

The term of office of the members elected by the Board of Supervisors shall be two 
and a half years. It may be extended once.  

2. 

Decisions by the Management Board shall be adopted on the basis of a majority of 
the members present. Each member shall have one vote.  

The  Executive  Director  shall  participate  in  meetings  of  the  Management  Board 
without the right to vote. 

The Management Board shall adopt and make public its rules of procedure.  

Meetings of the Management Board shall be convened by the Chairperson on its own 
initiative  or  at  the  request  of  at  least  a  third  of  its  members,  and  chaired  by  the 
Chairperson. 

It shall meet at least bi-annually in ordinary session. 

The  members  of  the  Management  Board  may,  subject to the rules of procedure, be 
assisted by advisers or experts.  

3. 

4. 

Article 31 
Independence 

The  members  of  the  Management  Board  shall  act  independently  and  objectively  in  the 
Community interest, without seeking or taking any instructions from Community institutions 
or bodies, from any government of a Member State or from any other public or private body. 

Article 32 
Tasks  

The  Management  Board  shall  ensure  that  the  Authority  carries  out  its  mission  and 
performs the tasks assigned to it in accordance with this Regulation. 

The Management Board shall propose, for adoption by the Board of Supervisors, an 
annual and multi-annual work programme. 

38 

   EN 

1. 

2. 

EN 

3. 

4. 

5. 

6. 

7. 

8. 

The  Management  Board  shall  exercise  its  budgetary  powers  in  accordance  with 
Articles 49 and 50. 

The Management Board shall adopt the Authority's staff policy plan and, pursuant to 
Article  54(2),  the  necessary  implementing  measures  of  the  Staff  Regulations  of 
Officials of the European Communities (hereinafter ‘the Staff Regulations'). 

The Management Board shall adopt the special provisions on right of access to the 
documents of the Authority, in accordance with Article 58. 

The  Management  Board  shall,  after  consulting  the  Board  of  Supervisors,  adopt  the 
annual  report  on  the  activities  of  the  Authority  on  the  basis  of  the  draft  report 
referred to in Article 38(7) and shall transmit that report to the European Parliament, 
the  Council,  the  Commission,  the  Court  of  Auditors,  the  European  Economic  and 
Social Committee by 15 June. The report shall be made public. 

The Management Board shall adopt and make public its rules of procedure. 

The  Management  Board  shall  appoint  and  remove  the  members  of  the  Board  of 
Appeal in accordance with Article 44(3) and 44(5). 

SECTION 3 
CHAIRPERSON 

Article 33 
Appointment and tasks 

1. 

The  Authority  shall  be  represented  by  a  Chairperson,  who  shall  be  a  full-time 
independent professional.  

2. 

3. 

4. 

The  Chairperson  shall  be  responsible  for  preparing  the  work  of  the  Board  of 
Supervisors  and  shall  chair  the  meetings  of  the  Board  of  Supervisors  and  the 
Management Board.  

The  Chairperson  shall  be  appointed  by  the  Board  of  Supervisors  on  the  basis  of 
merit, skills, knowledge of financial institutions and markets, and experience relevant 
to financial supervision and regulation, following an open selection procedure. 

Before  appointment,  the  candidate  selected  by  the  Board  of  Supervisors  shall  be 
subject to confirmation by the European Parliament. 

The Board of Supervisors shall also elect from among its members an alternate who 
shall carry out the functions of the Chairperson in his absence. 

The Chairperson's term of office shall be five years and may be extended once. 

In the course of the nine months preceding the end of the five-year term of office of 
the Chairperson, the Board of Supervisors shall evaluate: 

(a) 

the results achieved in the first term of Office and the way they were achieved; 

EN 

39 

   EN 

(b) 

the Authority’s duties and requirement in the coming years. 

The Board of Supervisors taking into account the evaluation may extend the term of 
office of the Chairperson once subject to confirmation by the European Parliament. 

5. 

The  Chairperson  may  be  removed  from  office  only  upon  Decision  of  the  Board  of 
Supervisors subject to confirmation by the European Parliament. 

The Chairperson may not prevent the Board of Supervisors from discussing matters 
relating to the Chairman, in particular the need for his or her removal and shall not be 
involved in deliberations concerning such a matter. 

Article 34 
Independence 

Without  prejudice  to  the  role  of  the  Board  of  Supervisors  in  relation  to  the  tasks  of  the 
Chairperson,  the  Chairperson  shall  neither  seek  nor  take  instructions  from  Community 
institutions or bodies, from  any government of a Member State or from any other public or 
private body.   

Article 35  
Report 

The  European  Parliament  may  invite  the  Chairperson  or  his  or  her  alternate,  while 
fully respecting his independence, to make a statement regularly before its competent 
committee and answer questions put by members of that committee. 

The European Parliament may also call upon the Chairperson to submit a report on 
the performance of his duties.  

SECTION 4 
EXECUTIVE DIRECTOR 

Article 36 
Appointment 

The Authority shall be managed by the Executive Director, who shall be a full-time 
independent professional.  

The Executive Director shall be appointed by the Board of Supervisors on the basis 
of  merit,  skills,  knowledge  of  financial  institutions  and  markets,  and  experience 
relevant to financial supervision and regulation and managerial experience, following 
an open selection procedure. 

The  Executive  Director's  term  of  office  shall  be  five  years  and  may  be  extended 
once. 

In the course of the nine months preceding the end of the five-year term of office of 
the Executive Director, the Board of Supervisors shall undertake an evaluation. 

1. 

2. 

1. 

2. 

3. 

4. 

EN 

40 

   EN 

In that evaluation, the Board of Supervisors shall assess in particular: 

(a) 

the results achieved in the first term of Office and the way they were achieved; 

(b) 

the Authority’s duties and requirement in the coming years. 

The Board of Supervisors taking into account the evaluation may extend the term of 
office of the Executive Director once. 

5. 

The  Executive  Director  may  be  removed  from  office  only  upon  Decision  of  the 
Board of Supervisors. 

Article 37 
Independence 

Without  prejudice  to  the  respective  roles  of  the  Management  Board  and  the  Board  of 
Supervisors  in  relation  to  the  tasks  of  the  Executive  Director,  the  Executive  Director  shall 
neither  seek  nor  take  instructions  from  any  government,  authority,  organisation  or  person 
outside the Authority. 

Article 38 
Tasks  

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

The Executive Director shall be in charge  of  the  management  of  the  Authority  and 
shall prepare the work of the Management Board. 

The  Executive  Director  shall  be  responsible  for  implementing  the  annual  work 
programme  of  the  Authority  under  the  guidance  of  the  Board  of  Supervisors  and 
under the control of the Management Board. 

The  Executive  Director  shall  take  the  necessary  measures,  notably  the  adoption  of 
internal  administrative  instructions  and  the  publication  of  notices,  to  ensure  the 
functioning of the Authority, in accordance with this Regulation. 

The Executive Director shall prepare a multi-annual work programme, as referred to 
in Article 32(2). 

Each year by 30 June, the Executive Director shall prepare a work programme for the 
following year, as referred to in Article 32(2).  

The  Executive  Director  shall  draw  up  a  preliminary  draft  budget  of  the  Authority 
pursuant  to  Article 49  and  shall  implement  the  budget  of the  Authority  pursuant  to 
Article 50. 

Each year the Executive Director shall prepare a draft annual report with a section on 
the regulatory and supervisory activities of the Authority and a section on financial 
and administrative matters. 

The  Executive  Director  shall  exercise  in respect  to  the  Authority's  staff  the  powers 
laid down in Article 54 and manage staff matters. 

EN 

41 

   EN 

CHAPTER IV 
EUROPEAN SYSTEM OF FINANCIAL SUPERVISORS 

SECTION 1 
GENERAL PROVISIONS 

Article 39 
Composition 

1. 

2. 

The  Authority  shall  form  part  of  the  ESFS,  which  shall  function  as  a  network  of 
supervisors. 

The ESFS shall comprise the following: 

(a) 

the  authorities  in  the  Member  States  as  specified  in  Article  1(2)  of  this 
Regulation, Article 1(2) of Regulation (EC) No …/… [EBA] and Article 1(2) 
of Regulation (EC) No …/… [ESMA ];  

(b) 

the Authority; 

(c) 

(d) 

(e) 

(f) 

the European Banking Authority set up under Article 1 of Regulation (EC) No 
…/…[EBA];  

the  European  Securities  and  Markets  Authority  set  up  under  Article  1  of 
Regulation (EC) No …/… [ ESMA]; 

the  Joint  Committee  of  European  Supervisory  Authorities  provided  for  in 
Article 40; 

the  Commission  for  the  purposes  of  carrying  out  the  tasks  referred  to  in 
Articles 7, 9 and 10. 

3. 

The  Authority  shall  cooperate  regularly  and  closely,  ensure  cross-sectoral 
consistency  of  work  and  arrive  at  joint  positions  in  the  area  of  supervision  of 
financial  conglomerates  and  on  other  cross-sectoral  issues  with  the  European 
Banking  Authority  and  the  European  Securities  and  Markets  Authority  through  the 
Joint Committee of European Supervisory Authorities set up in Article 40. 

SECTION 2 
JOINT COMMITTEE OF EUROPEAN SUPERVISORY AUTHORITIES 

Article 40 
Establishment 

1. 

A Joint Committee of the European Supervisory Authorities is hereby established. 

EN 

42 

   EN 

2. 

3. 

1. 

2. 

3. 

4. 

The Joint Committee shall serve as a forum in which the Authority shall cooperate 
regularly  and  closely  and  ensure  cross-sectoral  consistency  with  the  European 
Banking Authority and the European Securities and Markets Authority.  

The Authority shall contribute adequate resources to the administrative support of the 
includes  staff, 
Joint  Committee  of  European  Supervisory  Authorities.  This 
administrative, infrastructure, and operational expenses. 

Article 41 
 Composition 

The Joint Committee shall be composed of the Chairperson and the Chairpersons of 
the European Banking Authority and the European Securities and Markets Authority, 
and, where applicable, the Chairperson of a Sub-Committee established under Article 
43.  

The  Executive  Director,  the  Commission  and  the  ESRB  shall  be  invited  to  the 
meetings of the Joint Committee of European Supervisory Authorities as well as the 
Sub-Committees mentioned in Article 43 as observers. 

The  chair  of  the  Joint  Committee  of  European  Supervisory  Authorities  shall  be 
appointed  on  an  annual  rotational  basis  from  among  the  Chairpersons  of  the 
European  Banking  Authority,  the  European  Insurance  and  Occupational  Pensions 
Authority and the European Securities and Markets Authority. 

The Joint Committee of European Supervisory Authorities shall adopt and publish its 
own rules of procedure. The rules may specify further participants of the meetings of 
the Joint Committee. 

The  Joint  Committee  of  European  Supervisory  Authorities  shall  meet  at  least  once 
every two months. 

Article 42 
Joint positions and common acts  

Within the scope of its tasks in Chapter II, and notably with respect to the implementation of 
Directive  2002/87/EC,  where  relevant,  the  Authority  shall  reach  joint  positions  with  the 
European  Banking  Authority,  and  with  the  European  Securities  and  Markets  Authority  as 
appropriate.  

Acts under Articles 7, 9, 10, or 11 of this Regulation in relation to the application of Directive 
2002/87/EC and of any other legislation referred  to in Article 1(2) that also falls within the 
area  of  competence  of  the  European  Banking  Authority  or  the  European  Securities  and 
Markets  Authority  shall  be  adopted  by  the  Authority,  the  European  Banking  Authority,  and 
the European Securities and Markets Authority, as appropriate, in parallel. 

EN 

43 

   EN 

Article 43 
Sub-committees 

For  the  purposes  of  Article  42,  a  Sub-Committee  on  Financial  Conglomerates  to  the  Joint 
Committee of European Supervisory Authorities shall be established. 

That  Sub-Committee  shall  be  composed  of  the  individuals  mentioned  in  Article  41(1),  and 
one  high-level  representative  from  the  current  staff  of  the  relevant  national  supervisory 
authority from each Member State. 

The Sub-Committee shall elect a Chairperson from amongst its members, who shall also be a 
member of the Joint Committee of European Supervisory Authorities. 

The Joint Committee may establish further Sub Committees. 

SECTION 3 
BOARD OF APPEAL 

Article 44 
Composition 

1. 

2. 

3. 

4. 

5. 

The Board of Appeal shall be a joint body of the European Banking Authority, the 
European  Insurance  and  Occupational  Pensions  Authority,  and  the  European 
Securities and Markets Authority. 

The Board of Appeal shall be composed of six members and six alternates, who shall 
be individuals with relevant knowledge and experience, excluding current staff of the 
national supervisory authorities or other national or Community institutions involved 
in the activities of the Authority. 

The Board of Appeal designates its President. 

The decisions of the Board of Appeal shall be adopted on the basis of a majority of at 
least four of its six members. 

The Board of Appeal shall be convened by its President when necessary. 

Two members of the Board of Appeal and two alternates shall be appointed by the 
Management Board of the Authority from a short-list proposed by the Commission, 
following a public call for expression of interest published in the Official Journal of 
the European Union, and after consultation of the Board of Supervisors.  

The other Members shall be appointed in accordance with Regulation (EC) No …/… 
[EBA] and Regulation (EC) No …/… [ESMA].  

The term of office of the members of the Board of Appeal shall be five years. This 
term may be extended once. 

A member of the Board of Appeal, who was appointed by the Management Board of 
the  Authority,  may  not  be  removed  during  his  term  of  office,  unless  he  has  been 

EN 

44 

   EN 

6. 

1. 

2. 

3. 

4. 

found guilty of serious misconduct, and the Management Board takes a decision to 
that effect after consulting the Board of Supervisors. 

The  Authority,  the  European  Banking  Authority  and  the  European  Securities  and 
Markets  Authority  shall  ensure  adequate  operational  and  secretarial  support  for  the 
Board of Appeal. 

Article 45 
Independence and impartiality 

The members of the Board of Appeal shall be independent in making their decisions. 
They shall not be bound by any instructions. They may not perform any other duties 
in the Authority, in its Management Board or in its Board of Supervisors.  

Members of the Board of Appeal may not take part in any appeal proceedings if they 
have  any  personal  interest  therein,  or  if  they  have  previously  been  involved  as 
representatives of one of the parties to the proceedings, or if they have participated in 
the decision under appeal. 

If, for one of the reasons referred to in paragraph 1 and 2 or for any other reason, a 
member of a Board of Appeal considers that a fellow member should not take part in 
any appeal proceedings, the member shall inform the Board of Appeal accordingly. 

Any party to the appeal proceedings may object to the participation of a member of 
the  Board  of  Appeal  on  any  of  the  grounds  referred  to  in  paragraph  1  and  2,  or  if 
suspected of bias.  

An  objection  may  not  be  based  on  the  nationality  of  members  nor  shall  it  be 
admissible  if,  while  being  aware  of  a  reason  for  objecting,  the  party  to  the  appeal 
proceedings  has  nonetheless  taken  a  procedural  step  other  than  objecting  to  the 
composition of the Board of Appeal. 

5. 

The Board of Appeal shall decide on the action to be taken in the cases specified in 
paragraphs 1 and 2 without the participation of the member concerned.  

For the purpose of taking that decision, the member concerned shall be replaced on 
the Board of Appeal by his alternate, unless the alternate finds himself in a similar 
situation. Should this be the case, the Chairperson shall designate a replacement from 
among the available alternates. 

6. 

The members of the Board of Appeal shall undertake to act independently and in the 
public interest. 

For that purpose, they shall make a declaration of commitments and a declaration of 
interests  indicating  either  the  absence  of  any  interest  which  may  be  considered 
prejudicial  to  their  independence  or  any  direct  or  indirect  interest  which  might  be 
considered prejudicial to their independence.  

Those declarations shall be made public, annually and in writing. 

EN 

45 

   EN 

CHAPTER V 
REMEDIES 

Article 46 
Appeals 

1. 

2. 

Any  natural  or  legal  person,  including  national  supervisory  authorities,  may  appeal 
against a decision of the Authority referred to in Articles 9, 10 and 11 and any other 
decision taken by the Authority according to legislation as referred to in Article 1(2) 
which is addressed to that person, or against a decision which, although in the form 
of a decision addressed to another person, is of direct and individual concern to that 
person. 

The appeal, together with the statement of grounds thereof, shall be filed in writing at 
the  Authority  within  two  months  of  the  day  of  notification  of  the  decision  to  the 
person concerned, or, in the absence thereof, of the day on which the Authority has 
published its decision.  

The Board of Appeal shall decide upon the appeal within two months after the appeal 
has been lodged. 

3. 

An appeal lodged pursuant to paragraph 1 shall not have suspensive effect. 

4. 

5. 

6. 

7. 

1. 

The  Board  of  Appeal  may,  however,  if  it  considers  that  circumstances  so  require, 
suspend the application of the contested decision. 

If  the  appeal  is  admissible,  the  Board  of  Appeal  shall  examine  whether  it  is  well-
founded. It shall as often as necessary invite the parties to the appeal proceedings to 
file  observations  on  notifications  issued  by  itself  or  on  communications  from  the 
other  parties  to  the  appeal  proceedings,  within  specified  time  limits.  Parties  to  the 
appeal proceedings shall be entitled to make an oral presentation. 

The Board of Appeal may, within the provisions of this Article, exercise any power 
which  lies  within  the  competence  of  the  Authority,  or  it  may  remit  the  case  to  the 
competent  body  of  the  Authority.  That  body  shall  be  bound  by  the  decision  of  the 
Board of Appeal. 

The Board of Appeal shall adopt and make public its rules of procedure. 

The  decisions  taken  by  the  Board  of  Appeal  shall  be  reasoned  and  made  public  by 
the Authority. 

Article 47 
Actions before the Court of First Instance and the Court of Justice 

An action may be brought before the Court of First Instance or the Court of Justice, 
in  accordance  with  Article  230  of  the  Treaty,  contesting  a  decision  taken  by  the 
Board  of  Appeal  or,  in  cases  where  there  is no right of  appeal before the Board of 
Appeal, by the Authority. 

EN 

46 

   EN 

2. 

3. 

In the event that the Authority has an obligation to act and fails to take a decision, 
proceedings for failure to act may be brought before the Court of First Instance or the 
Court of Justice in accordance with Article 232 of the Treaty. 

The  Authority  shall  be  required  to  take  the  necessary  measures  to  comply  with  the 
judgment of the Court of First Instance or the Court of Justice. 

CHAPTER VI 
FINANCIAL PROVISIONS 

Article 48 
Budget of the Authority 

1. 

The revenues of the Authority shall consist, in particular, of: 

2. 

3. 

4. 

1. 

(a) 

(b) 

(c) 

obligatory contributions from the national public authorities competent for the 
supervision of financial institutions;  

a subsidy from the Community, entered in the General Budget of the European 
Union (Commission Section); 

any fees paid to the Authority in the cases specified in the relevant instruments 
of Community law. 

The  expenditure  of  the  Authority  shall  include,  at  least,  staff,  remuneration, 
administrative, infrastructure and operational expenses.  

Revenue and expenditure shall be in balance. 

Estimates  of  all  Authority  revenue  and  expenditure  shall  be  prepared  for  each 
financial  year,  corresponding  to  the  calendar  year,  and  shall  be  presented  in  the 
budget of the Authority. 

Article 49 
Establishment of the budget 

By 15 February each year, the Executive Director shall draw up a draft statement of 
estimates  of  revenue  and  expenditure  for  the  following  financial  year,  and  shall 
forward  this  preliminary  draft  budget  to  the  Management  Board,  together  with  the 
establishment  plan.  Each  year,  the  Management  Board  shall,  on  the  basis  of  the 
preliminary  draft  drawn  up  by  the  Executive  Director,  produce  a  statement  of 
estimates  of  revenue  and  expenditure  of  the  Authority  for  the  following  financial 
year.  That  statement  of  estimates,  including  a  draft  establishment  plan,  shall  be 
transmitted  by  the  Management  Board  to  the  Commission  by  31  March.  Prior  to 
adoption of the statement of estimates, the draft prepared by the Executive Director 
shall be approved by the Board of Supervisors. 

2. 

The statement of estimates shall be transmitted by the Commission to the European 
Parliament  and  to  the  Council  (hereinafter  referred  to  as  the  'budgetary  authority'), 
together with the preliminary draft General Budget of the European Union.  

EN 

47 

   EN 

3. 

4. 

5. 

6. 

1. 

2. 

3. 

On  the  basis  of  the  statement  of  estimates,  the  Commission  shall  enter  in  the 
preliminary  draft  General  Budget  of  the  European  Union  the  estimates  it  deems 
necessary  in  respect  of  the  establishment  plan  and  the  amount  of  the  subsidy  to  be 
charged to the general budget of the European Union in accordance with Article 272 
of the Treaty. 

The  budgetary  authority  shall  adopt  the  establishment  plan  for  the  Authority.  The 
budgetary  authority  shall  authorise  the  appropriations  for  the  subsidy  to  the 
Authority.  

The  budget  of  the  Authority  shall  be  adopted  by  the  Management  Board.  It  shall 
become  final  after  the  final  adoption  of the general budget of the European Union. 
Where necessary, it shall be adjusted accordingly. 

The  Management  Board  shall,  without  delay,  notify  the  budgetary  authority  of  its 
intention to implement any project which may have significant financial implications 
for the funding of its budget, in particular any project relating to property such as the 
rental  or  purchase  of  buildings.  It  shall  inform  the  Commission  thereof.  If  either 
branch of the budget authority intends to issue an opinion, it shall, within two weeks 
of  receipt  of  the  information  on  the  project,  notify  the  Authority  of  its  intention  to 
issue such an opinion. In the absence of a reply, the Authority may proceed with the 
planned operation. 

Article 50 
Implementation and control of the budget 

The  Executive  Director  shall  act  as  authorising  officer  and  shall  implement  the 
Authority's budget. 

By  1  March  following  the  completion  of  each  financial  year,  the  Authority 
accounting  officer  shall  forward  to  the  Commission's  accounting  officer  and  to  the 
Court of Auditors the provisional accounts, accompanied by the report on budgetary 
and  financial  management  during  the  financial  year.  The  Authority  accounting 
officer  shall  also  send  the  report  on  budgetary  and  financial  management  to  the 
members of the Board of Supervisors, the European Parliament and the Council by 
31 March of the following year. 

The Commission's accounting officer shall then consolidate the provisional accounts 
of the institutions and decentralised bodies in accordance with Article 128 of Council 
Regulation (EC, Euratom) No 1605/200240, (hereinafter referred to as the 'Financial 
Regulation'). 

After receiving the observations of the Court of Auditors on the provisional accounts 
of  the  Authority  in  accordance  with  the  provisions  of  Article  129  of  the  Financial 
Regulation,  the  Executive  Director,  acting  on  his  own  responsibility,  shall  draw  up 
the  final  accounts  of  the  Authority  and  transmit  them,  for  opinion,  to  the 
Management Board. 

40 

OJ L 248, 16.9.2002, p. 1. 

EN 

48 

   EN 

                                                 
4. 

5. 

6. 

7. 

8. 

9. 

The  Management  Board  shall  deliver  an  opinion  on  the  final  accounts  of  the 
Authority. 

The  Executive  Director  shall  transmit  those  final  accounts,  accompanied  by  the 
opinion  of  the  Management  Board,  by  1  July  following  the  completion  of  the 
financial year, to the Members of the Board of Supervisors, the European Parliament, 
the Council, the Commission and the Court of Auditors. 

The final accounts shall be published. 

The  Executive  Director  shall  send  the  Court  of  Auditors  a  reply  to  the  latter's 
observations by 30 September. He or she shall also send a copy of this reply to the 
Management Board and the Commission. 

The  Executive  Director  shall  submit  to  the  European  Parliament,  at  the  latter's 
request  and  as  provided  for  in  Article  146(3)  of  the  Financial  Regulation,  any 
information necessary for the smooth application of the discharge procedure for the 
financial year in question. 

The European Parliament, following a recommendation from the Council acting by 
qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the 
Authority for the implementation of the budget for the financial year N. 

Article 51 
Financial rules 

The  financial  rules  applicable  to  the  Authority  shall  be  adopted  by  the  Management  Board 
after  the  Commission  has  been  consulted.  Those  rules  may  not  depart  from  Commission 
Regulation  (EC, Euratom)  No  2343/200241  unless  the  specific  operational  needs  for  the 
functioning of the Authority so require and only with the prior agreement of the Commission. 

Article 52 
Anti-fraud measures 

For  the  purposes  of  combating  fraud,  corruption  and  any  other  illegal  activity,  the 
provisions  of  Regulation  (EC)  No  1073/1999  shall  apply  to  the  Authority  without 
any restriction. 

The  Authority  shall  accede  to  the  Interinstitutional  Agreement  of  25  May  1999 
between  the  European  Parliament,  the  Council  of  the  European  Union  and  the 
Commission of the European Communities concerning internal investigations by the 
European  Anti-Fraud  Office  (OLAF)42  and  shall  immediately  adopt  appropriate 
provisions for all staff of the Authority. 

The  funding  decisions  and  the  agreements  and  the  implementing  instruments 
resulting  from  them  shall  explicitly  stipulate  that  the  Court  of  Auditors  and  OLAF 
may,  if  need  be,  carry  out  on-the-spot  checks  on  the  beneficiaries  of  monies 

OJ L 357, 31.12.2002, p. 72. 
OJ L 136, 31.5.1999, p. 15. 

1. 

2. 

3. 

41 
42 

EN 

49 

   EN 

                                                 
disbursed  by  the  Authority  as  well  as  on  the  staff  responsible  for  allocating  these 
monies. 

CHAPTER VII 
GENERAL PROVISIONS 

Article 53 
Privileges and immunities 

The Protocol on Privileges and Immunities of the European Communities shall apply to the 
Authority and its staff. 

Article 54 
Staff 

1. 

2. 

3. 

4. 

1. 

2. 

1. 

The Staff Regulations, the Conditions of employment of other servants and the rules 
adopted jointly by the European Community institutions for the purpose of applying 
these shall apply to the staff of the Authority, including its Executive Director. 

The  Management  Board,  in  agreement  with  the  Commission,  shall  adopt  the 
necessary implementing measures, in accordance with the arrangements provided for 
in Article 110 of the Staff Regulations. 

In  respect  of  its  staff,  the  Authority  shall  exercise  the  powers  conferred  on  the 
appointing  authority  by  the  Staff  Regulations  and  on  the  authority  entitled  to 
conclude contracts by the Conditions of employment of other servants. 

The  Management  Board  shall  adopt  provisions  to  allow  national  experts  from 
Member States to be seconded to the Authority. 

Article 55 
Liability of the Authority 

In  the  case  of  non-contractual  liability,  the  Authority  shall,  in  accordance  with  the 
general  principles  common  to  the  laws  of  the  Member  States,  make  good  any 
damage caused by it or by its staff in the performance of their duties. The Court of 
Justice shall have jurisdiction in any dispute over the remedying of such damage. 

The  personal  financial  liability  and  disciplinary  liability  of  Authority  staff  towards 
the Authority shall be governed by the relevant provisions applying to the staff of the 
Authority. 

Article 56 
Obligation of Professional Secrecy 

Members  of  the  Board  of  Supervisors  and  the  Management  Board,  the  Executive 
Director, and members of the staff of the Authority including officials seconded by 
Member  States  on  a  temporary  basis  shall  be  subject  to  the  requirements  of 

EN 

50 

   EN 

professional secrecy pursuant to Article 287 of the Treaty and the relevant provisions 
in the relevant community legislation, even after their duties have ceased.  

2. 

3. 

Without  prejudice  to  cases  covered  by  criminal  law,  any confidential  information 
received by persons referred to in paragraph 1 whilst performing their duties may not 
be divulged to any person or authority whatsoever, except in summary or aggregate 
form, such that individual financial institutions cannot be identified. 

Moreover,  the  obligation  under  paragraphs  1  and  the  first  subparagraph  of  this 
paragraph  shall  not  prevent  the  Authority  and  the  national  supervisory  authorities 
from  using  the  information  for  the  enforcement  of  the  legislation  referred  to  in 
Article 1(2), and in particular for legal proceedings for the adoption of decisions. 

Paragraphs 1 and 2 shall not prevent the Authority from exchanging information with 
national  supervisory  authorities  in  accordance  with  this  Regulation  and  other 
community legislation applicable to financial institutions. 

That information shall be subject to the conditions of professional secrecy indicated 
in paragraphs 1 and 2.The Authority shall lay down in its internal rules of procedure 
the  practical  arrangements  for  implementing  the  confidentiality  rules  referred  to  in 
paragraphs 1 and 2. 

4. 

The Authority shall apply Commission Decision 2001/844/EC, ECSC, Euratom43. 

Article 57 
Data protection 

This regulation shall be without prejudice to the obligations of Member States relating to their 
processing  of  personal  data  under  Directive  95/46/EC  or  the  obligations  of  the  Authority 
relating to its processing of personal data under Regulation (EC) No 45/2001 when fulfilling 
its responsibilities. 

Article 58 
Access to documents 

1. 

2. 

3. 

Regulation (EC) No 1049/2001 shall apply to documents held by the Authority. 

The Management Board shall adopt practical measures for applying Regulation (EC) 
No 1049/2001 by 31 May 2011. 

Decisions  taken  by  the  Authority  pursuant  to  Article  8  of  Regulation  (EC)  No 
1049/2001 may be the subject of a complaint to the Ombudsman or of proceedings 
before the Court of Justice, following appeal to the Board of Appeal, as appropriate, 
in  accordance  with  the  conditions  laid  down  in  Articles  195  and  230  of  the  Treaty 
respectively. 

43 

OJ L 317, 3.12.2001, p.1. 

EN 

51 

   EN 

                                                 
Article 59 
Language arrangements 

1. 

2. 

3. 

The provisions of Council Regulation No 144 shall apply to the Authority. 

The  Management  Board  shall  decide  on  the  internal  language  arrangements  for  the 
Authority. 

The  translation  services  required  for  the  functioning  of  the  Authority  shall  be 
provided by the Translation Centre for the Bodies of the European Union. 

Article 60 
Headquarters Agreement 

The necessary arrangements concerning the accommodation to be provided for the Authority 
in the Member State where its seat is located and the facilities to be made available by that 
Member State, as well as the specific rules applicable in that Member State to the Executive 
Director, the members of the Management Board, staff of the Authority and members of their 
families  shall  be  laid  down  in  a  Headquarters  Agreement  between  the  Authority  and  that 
Member State concluded after obtaining the approval of the Management Board. 

That Member State shall provide the best possible conditions to ensure proper functioning of 
the Authority, including multilingual, European-oriented schooling and appropriate transport 
connections. 

Article 61 
Participation of third countries 

Participation in the work of the Authority shall be open to countries which are not members of 
the  European  Union  and  which  have  concluded  agreements  with  the  Community  whereby 
they  have  adopted  and  are  applying  Community  law  in  the  area  of  competence  of  the 
Authority as referred to in Article 1(2). 

Under the relevant provisions of these agreements, arrangements shall be made specifying, in 
particular, the nature, scope and procedural aspects of the involvement of these countries in 
the work of the Authority, including provisions relating to financial contributions and to staff. 
They may provide for representation, as an observer, on the Board of Supervisors, but shall 
ensure  that  these  countries  do  not  attend  any  discussions  relating  to  individual  financial 
institutions, except where there is a direct interest. 

44 

OJ 17, 6.10.1958, p. 385/58. 

EN 

52 

   EN 

                                                 
CHAPTER VIII 
TRANSITIONAL AND FINAL PROVISIONS 

Article 62 
Preparatory actions 

The Commission shall be responsible for the administrative establishment and initial 
administrative  operation  of  the  Authority  until  the  Authority  has  the  operational 
capacity to implement its own budget. 

For  that  purpose,  until  such  time  as  the  Executive  Director  takes  up  his  duties 
following  his  appointment  by  the  Board  of  Supervisors  in  accordance  with  Article 
36, the Commission may assign one official on an interim basis in order to fulfil the 
functions of the Executive Directors. 

The  interim  Executive  Director  may  authorise  all  payments  covered  by  credits 
provided  in  the  budget  of  the  Authority,  once  approved  by  the  Management  Board 
and may conclude contracts, including staff contracts following the adoption of the 
Authority’s establishment plan.  

Paragraphs 1 and 2 are without prejudice to the powers of the Board of Supervisors 
and the Management Board. 

Article 63 
Transitional Staff provisions 

By  way  of  derogation  from  Article  54,  all  employment  contracts  concluded  by  the 
Committee  of  European  Insurance  and  Occupational  Pensions  Supervisors  or  its 
Secretariat  and  in  force  on  the  date  of  application  of  this  Regulation  shall  be 
honoured until their expiry date. They may not be extended. 

All members of staff under contracts referred to in paragraph 1 shall be offered the 
possibility  of  concluding  temporary  agent  contracts  under  Article  2(a)  of  the 
Conditions of Employment of Other Servants at the various grades as set out in the 
Authority’s establishment plan. 

An  internal  selection  limited  to  staff  who  have  contracts  with  the  Committee  of 
European Insurance and Occupational Pensions Supervisors or its Secretariat shall be 
carried out after the entry into force of this Regulation by the authority authorised to 
conclude contracts in order to check the ability, efficiency and integrity of those to be 
engaged. 

Depending on the type and level of functions to be performed, successful applicants 
shall  be  offered  temporary  agents’  contracts  of  a  duration  corresponding  at  least  to 
the time remaining under the prior contract. 

The relevant national law relating to labour contracts and other relevant instruments 
shall continue to apply to staff members with prior contracts who choose not to apply 
for temporary agent's contracts or who are not offered temporary agents contracts in 
accordance with paragraph 2. 

1. 

2. 

3. 

1. 

2. 

3 

4. 

EN 

53 

   EN 

Article 64 
Amendments  

Council  and  Parliament  Decision  n°  …  of  …  establishing  a  Community  programme  to 
support specific activities in the field of financial services, financial reporting and auditing, is 
hereby amended insofar as the Committee of European Insurance and Occupational Pension 
Supervisors is removed from the list of beneficiaries set out in Section B of the Annex to that 
Decision.  

Article 65 
Repeal 

Commission  Decision  2009/79/EC,  establishing  the  Committee  of  European  Insurance  and 
Occupational Pensions Supervisors, is hereby repealed.  

Article 66 
Evaluation 

1. 

Within  three  years  from  the  date  set  out  in  the  second  paragraph  of  Article  67  and 
every  three  years  thereafter,  the  Commission  shall  publish  a  general  report  on  the 
experience acquired as a result of the operation of the Authority and the procedures 
laid down in this Regulation. 

That report shall also evaluate progress achieved towards regulatory and supervisory 
convergence  in  the  fields  of  crisis  management  and  resolution  in  the  Community. 
The  evaluation  shall  be  based  on  extensive  consultation,  including  with  the 
Insurance, Reinsurance and Occupational Pension Funds Stakeholder Group. 

2. 

The  report  and  any  accompanying  proposals,  as  appropriate,  shall  be  forwarded  to 
the European Parliament and to the Council. 

Article 67 
Entry into force  

.This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

It shall apply from 1 January 2011. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

EN 

54 

   EN 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

EN 

55 

   EN 

 
 
LEGISLATIVE FINANCIAL STATEMENT 

This document is intended to accompany and complement the Explanatory Memorandum. As 
such,  when  completing  this  Legislative  Financial  Statement,  and  without  prejudice  to  its 
legibility,  an  attempt  should  be  made  to  avoid  repeating  information  contained  in  the 
Explanatory  Memorandum.  Before  filling  in  this  template,  please  refer  to  the  specific 
Guidelines that have been drafted to provide guidance and clarification for the items below.  

1. 

NAME OF THE PROPOSAL: 

Regulation (EC) No xxx of the European Parliament and of the Council establishing 
a European Insurance and Occupational Pensions Authority 

2. 

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

Internal Market – Financial markets 

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative 
assistance lines (ex- B..A lines)) including headings: 

New lines need to be created (the names and numbers are only indicative):  

Headings:  

12 

Internal Market 

12.04 Financial Markets 

12.0403 

European Insurance and Occupational Pensions Authority 

Budget lines:  

12.0403.01  EIOPA  –  Subsidy  under  Titles  1  an  2  (Staff  and  administrative 
expenditure) 

12.0403.02  EIOPA – Subsidy under Title 3 (Operating expenditure) 

3.2. 

Duration of the action and of the financial impact: 

Indeterminate 

EN 

56 

   EN 

3.3. 

Budgetary characteristics : 

Budget 
line 

120401
0101 

120401
0102 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Non-
comp 

Non-
comp 

Diff45 

YES 

YES 

Diff 

YES 

YES 

NO 

NO 

No 1a 

No 1a 

4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA) 

EUR million (to 3 decimal places) 

Expenditure type 

Section 
no. 

Operational expenditure46 

Commitment Appropriations 
(CA) 

8.1. 

Payment 
(PA) 

Appropriations 

a 

b 

2011 

2012 

2013 

Total 

4, 235 

5, 950  6, 799  16, 984 

4, 235 

5, 950  6, 799  16, 984 

Administrative expenditure within reference amount47 

Technical  &  administrative 
assistance (NDA) 

8.2.4. 

c 

-- 

-- 

-- 

-- 

TOTAL REFERENCE AMOUNT 

Commitment 
Appropriations 

a+c 

4, 235 

5, 950  6, 799  16, 984 

Payment Appropriations 

b+c 

4, 235 

5, 950  6, 799  16, 984 

Administrative expenditure not included in reference amount48 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

8.2.5. 

d 

-- 

-- 

-- 

-- 

45 
46 
47 
48 

Differentiated appropriations 
Expenditure that does not fall under Chapter 12 01 of the Title 12 concerned. 
Expenditure within article 12 01 04 of Title 12. 
Expenditure within chapter 12 01 other than articles 12 01 04 or 12 01 05. 

EN 

57 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Administrative  costs,  other 
than  human  resources  and 
not 
associated 
included 
reference 
in 
amount (NDA) 

costs, 

8.2.6. 

e 

-- 

-- 

-- 

-- 

Total indicative financial cost of intervention 

TOTAL CA including cost 
of Human Resources 

TOTAL  PA  including  cost 
of Human Resources 

Co-financing details 

Co-financing body 

(national 
Member  States 
supervisory  authorities  or 
ministries of finance) 

TOTAL  CA  including  co-
financing 

a+c
+d+
e 

b+c
+d+
e 

f 

a+c
+d+
e+f 

4, 235 

5, 950  6, 799  16, 984 

4, 235 

5, 950  6, 799  16, 984 

EUR million (to 3 decimal places) 

2011 

2012 

2013 

Total 

6, 352 

8, 925  10, 199  25, 476 

10, 587  14, 874  16, 998  42, 459 

4.1.2.  Compatibility with Financial Programming 

(cid:133) 

Proposal is compatible with existing financial programming. 

× 

× 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement49 (i.e. flexibility instrument or revision of the financial perspective). 

4.1.3.  Financial impact on Revenue 

× 

Proposal has no financial implications on revenue 

49 

See points 19 and 24 of the Interinstitutional agreement. 

EN 

58 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
4.2. 

Human Resources FTE (including officials, temporary and external staff) – see 
detail under point 8.2.1. 

Annual requirements 

2011 

2012 

2013 

n + 3 

n + 4 

n + 5 
and 
later 

Total  number  of  human 
resources 

2,4 

2,4 

2,4 

5. 

CHARACTERISTICS AND OBJECTIVES 

5.1. 

Need to be met in the short or long term 

In  the  short  term,  create  the  European  Insurance  and  Occupational  Pensions 
Authority as a part of the new European System of Financial Supervisors, consisting 
of a network of European and national supervisory authorities and aiming at a more 
effective and efficient organisation of financial supervision in the EU. In the longer 
term,  the  EIOPA  should  enhance  coordination  of  supervision  of  the  EU  insurance 
and  pension  fund  sector  and  contribute  to  developing  a  European  dimension  of 
financial supervision to complete the EU single market for financial services. 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with 
other financial instruments and possible synergy 

The financial crisis has highlighted several substantial weaknesses of the current EU 
framework  for  financial  supervision.  The  following  problems,  which  underpin  the 
need of the Community involvement, have been identified: 

•  There  is  no  mechanism  to  ensure  that  national  supervisors  arrive  at  the  best 

possible supervisory decisions for cross-border institutions;  

•  Co-operation and information exchange between national supervisory authorities 

is insufficient;  

•  All  the  technical  details  of  financial  regulation  have  to  go  through  slow  and 

cumbersome procedures; 

•  Joint  action  by  national  authorities  needs  to  take  account  of  the  patchwork  of 

regulatory and supervisory requirements;  

•  Only national solutions are available and can be implemented in the face of pan-

European problems.  

EN 

59 

   EN 

 
 
 
 
 
 
 
 
 
The current EU Committees of Supervisors50 have limited powers to deal with such 
issues. 

5.3. 

Objectives, expected results and related indicators of the proposal in the context 
of the ABM framework 

The  following  general  objectives  have  been  identified  for  the  European  System  of 
Financial Supervisors, and in particular for the European Insurance and Occupational 
Pensions Authority: 

1. 

2. 

3. 

4. 

Balance  home  and  host  supervisor  interests,  i.e.,  reinforce  processes  and 
practices for challenging the decisions of national supervisors on a cross-border 
basis; 

Ensure  a  level  playing  field  for  financial  institutions  operating  in  various 
Member States; 

Improve crisis prevention and crisis management on the European scale, and 

Improve  effectiveness  and  cost  efficiency  of  supervision  for  supervised 
companies. 

Flowing from the general objectives, a number of specific tasks for the ESFS have 
been defined:  

1.  All of the current tasks of the current EU Committees of supervisors; 

2. 

3. 

4. 

5. 

6. 

The development of technical standards to build a single rulebook in the EU 

Ensure  consistent  application  of  EU  rules  and  mediate  on  and  Settle 
disagreements between national supervisors; 

Ensure coordinated decision making in emergencies; 

The supervision of certain entities with a pan European reach 

Ensure a common supervisory culture. 

The  following  table  presents  the  specific  objectives  of  the  European  Insurance  and 
Occupational Pensions Authority and matches them with related indicators 

Objective 

The development of technical 
standards to build a single 

Proposed indicator 

•  Number  of  adopted  technical  standards  relative  to  those 

required to be developed 

50 

Committee  of  European  Banking  Supervisors,  Committee  of  European  Insurance  and  Occupational 
Pensions Supervisors and Committee of European Securities Regulators. 

EN 

60 

   EN 

                                                 
rulebook in the EU 

•  Number of standards proposed by EIOPA and rejected by the 

Commission 

•  Number of adopted non-binding recommendations 

Ensure  consistent  application 
of EU rules 

•  Number of successful mediations without binding settlement 
•  Number  of  warnings  on  manifest  breach  of  the  Community 

law 

Ensure 
supervisory 
participation 
supervisors 

a 

common 
culture: 
in  colleges  of 

•  Number of colleges with EIOPA participation 
•  Average number of meetings per college attended by EIOPA 

representatives 

Ensure 
supervisory 
activities 

a 
common 
culture:  other 

Carry  out  direct  supervision 
financial 
of  pan-European 
institutions  

Ensure  coordinated  decision 
making in emergencies 

common 
a 
Ensure 
supervisory  culture:  Collect 
and manage micro-prudential 
information 

•  Number of hours training for supervisors 
•  Number of staff participating in exchanges / secondments 
•  Number of peer reviews conducted 
•  Number of obstacles to convergence identified and removed 
•  New practical tools and instruments to promote convergence 

[Relevant only for the European Securities and Markets Authority at present] 

•  Effectiveness  mediation,  decisions  and  coordination  in  crisis 

situations 

•  Progress 

in  development  of 
completeness and timeliness of information 

the  central  databases: 

5.4.  Method of Implementation (indicative) 

(cid:133)  Centralised Management 

(cid:133) 

(cid:133) 

directly by the Commission 

indirectly by delegation to: 

(cid:133) 

executive Agencies 

× 

bodies set up by the Communities as referred to in art. 185 of the 
Financial Regulation 

(cid:133) 

national public-sector bodies/bodies with public-service mission 

(cid:133) 

Shared or decentralised management 

(cid:133)  with Member states 

(cid:133)  with Third countries 

EN 

61 

   EN 

 
 
 
(cid:133) 

Joint management with international organisations (please specify) 

Relevant comments: 

6. 

MONITORING AND EVALUATION 

6.1.  Monitoring system 

The  Regulation  establishing  the  European  Insurance  and  Occupational  Pensions 
Authority  provides  for  evaluation  of  the  experience  acquired  as  a  result  of  the 
operation  of  the  Authority  and  the  procedures  laid  down  in  this  Regulation  every 
three years from the effective start of its operation. To this end, the Commission shall 
publish  a  general  report,  which  will  also  evaluate  progress  achieved  towards 
regulatory  and  supervisory  convergence.  The  report  and  any  accompanying 
proposals shall be forwarded to the European Parliament and to the Council.  

6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

Two  impact  assessments  have  been  carried  out  for  the  proposal  to  reform  the 
financial supervision system in the EU:  

1. 

2. 

The  first  general  impact  assessment  (SEC(2009)  715)  accompanied  the 
Communication 'European financial supervision' of 27 May (COM(2009) 252). 
The analysis in that report led to selecting the creation of the European System 
of Financial Supervisors as the best option for the reform of micro-prudential 
supervision framework in the EU. 

The  second,  more  specific  impact  assessment  has  been  carried  out  to 
accompany the draft Regulations establishing the European Banking Authority, 
the  European  Insurance  and  Occupational  Pensions  Authority  and  the 
European  Securities  Markets  Authority.  In  this  IA  a  number  of  options  for 
particular  tasks  and  governance  aspects  of  the  new  Authorities  have  been 
considered. It also includes budgetary estimates which have been used in this 
Legislative Financial Statement.  

6.2.2.  Measures taken  following  an intermediate/ex-post evaluation (lessons  learned from 

similar experiences in the past) 

Not applicable. 

6.2.3.  Terms and frequency of future evaluation 

The final set of indicators to assess the performance of the European Insurance and 
Occupational Pensions Authority will be decided by the Commission at the time of 
conducting  the  first  required  evaluation.  For  the  final  assessment,  the  quantitative 
indicators  will  be  as  important  as  the  qualitative  evidence  gathered  in  the 
consultations, including the input from the specially designed insurance and pension 
fund Stakeholder Group. The evaluation will be repeated every three years. 

EN 

62 

   EN 

7. 

ANTI-FRAUD MEASURES  

For  the  purposes  of  combating  fraud,  corruption  and  any  other  illegal  activity,  the 
provisions of Regulation (EC) No 1073/1999 of the European Parliament and of the 
Council of 25 May 1999 concerning investigations conducted by the European Anti-
Fraud Office (OLAF) shall apply to the Authority without any restriction. 

The  Authority  shall  accede  to  the  Interinstitutional  Agreement  of  25  May  1999 
between  the  European  Parliament,  the  Council  of  the  European  Union  and  the 
Commission of the European Communities concerning internal investigations by the 
European  Anti-Fraud  Office  (OLAF)  and  shall  immediately  adopt  appropriate 
provisions for all staff of the Authority. 

The  funding  decisions  and  the  agreements  and  the  implementing  instruments 
resulting  from  them  shall  explicitly  stipulate  that  the  Court  of  Auditors  and  OLAF 
may,  if  need  be,  carry  out  on-the-spot  checks  on  the  beneficiaries  of  monies 
disbursed  by  the  Authority  as  well  as  on  the  staff  responsible  for  allocating  these 
monies. 

EN 

63 

   EN 

8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

Please refer to Annex 1 for a detailed breakdown of the Authority's costs and to Annex 2 for the main underlying assumptions, and Annex 3 
for a detailed establishment plan. 

Commitment appropriations in EUR million (to 3 decimal places) 

Type of output 

Av. 
cost 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 and 
later 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

of 

(Headings 
Objectives, 
actions 
and 
outputs should be 
provided) 

OPERATIONAL 
OBJECTIVE  No.1 
51……… 

Action 
1………………. 

- Output 1 

- Output 2 

Action 
2………………. 

- Output 1 

Sub-total 
Objective 1 

OPERATIONAL 

51 

As described under Section 5.3. 

EN 

64 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
OBJECTIVE  No.2 
1……… 

Action 
1………………. 

- Output 1 

Sub-total 
Objective 2 

OPERATIONAL 
OBJECTIVE  No.n 
1 

Sub-total 
Objective n 

TOTAL COST 

EN 

65 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of post 

Staff to be assigned to management of the action using existing and/or 
additional resources (number of posts/FTEs) 

2011 

2012 

2013 

Year n+3  Year n+4  Year n+5 

-- 

-- 

Officials or 
temporary 
staff52 (XX 01 
01) 

A*/AD 

B*, 
C*/AST 

1,2 

1,2 

Staff  financed53  by  art. 
XX 01 02 

Other  staff54  financed by 
art. XX 01 04/05 

TOTAL 

-- 

-- 

2,4 

1,2 

1,2 

-- 

-- 

1,2 

1,2 

-- 

-- 

2,4 

2,4 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

8.2.2.  Description of tasks deriving from the action 

•  Operational  management  of  the  Commission  relations  with  the  Authority  (equivalent  of 

time of one AD in an operational unit) 

•  Financial  management  of  the  subsidy  from  the  Community  budget  to  the  Authority 
(equivalent  of  time  of  one  AST  in  an  operational  unit  and  20%  of  one  AST  time  in  the 
financial unit) 

•  Monitoring and auditing (20% of one AD time in Internal Audit Capability of DG Markt)  

8.2.3. 

Sources of human resources (statutory) 

× 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 
(internal redeployment) 

12 posts have been already requested in the Legislative Financial Statement annexed 
to  a  draft  decision  establishing  a  Community  programme  to  support  specific 
activities  in  the  field  of  financial  services,  financial  reporting  and  auditing 
(COM(2009)14 final). In total about 8 out of those posts will be redeployed within 
DG  MARKT  to  deal  with  the  new  European  Supervisory  Authorities  (full  or  part 
time): 6 in operational units; 1 in the financial unit and 1 in the IAC. 

8.2.4.  Other  Administrative  expenditure  included  in  reference  amount  (XX  01  04/05  – 

Expenditure on administrative management) 

Not applicable 

52 
53 
54 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

66 

   EN 

 
 
 
 
 
 
 
                                                 
8.2.5.  Financial cost of human resources and associated costs not included in the reference 

amount 

EUR million (to 3 decimal places) 

Type of human resources 

2011 

2012 

2013 

Year 
n+3 

Year 
n+4 

Officials  and  temporary  staff 
(XX 01 01) 

Staff  financed  by  Art  XX  01 
02  (auxiliary,  END,  contract 
staff, etc.) 

(specify budget line) 

0,293 

0,293 

0,293 

-- 

0 

0 

0 

-- 

-- 

-- 

Year 
n+5 

and later 

-- 

-- 

cost 

Total 
of  Human 
Resources  and  associated 
costs 
in  reference 
amount) 

(NOT 

0,293 

0,293 

0,293 

-- 

-- 

-- 

Calculation– Officials and Temporary agents 

2 officials in an operational unit 

0,2 of one official's time in the financial unit 

0,2 of one official's time in Internal Audit Capability of DG Markt 

2,4 x 0,122 = 0,293 

Calculation– Staff financed under art. XX 01 02 

Not applicable 

EN 

67 

   EN 

 
 
 
 
 
8.2.6. Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

XX 01 02 11 01 – Missions 

XX 01 02 11 02 – Meetings & Conferences 

XX 01 02 11 03 – Committees55  

XX 01 02 11 04 – Studies & consultations 

XX 01 02 11 05 - Information systems 

2 

Total 

Other  Management 

Expenditure (XX 01 02 11) 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

Year 
n+5 

and 
later 

-- 

-- 

-- 

-- 

-- 

-- 

3  Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

-- 

-- 

-- 

-- 

-- 

-- 

TOTAL 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

expenditure, 
than  human  resources  and 
in 

Total  Administrative 
other 
associated  costs  (NOT 
reference amount) 

included 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

Calculation - Other administrative expenditure not included in reference amount 

Not applicable 

55 

Specify the type of committee and the group to which it belongs. 

EN 

68 

   EN 

 
 
 
                                                 
ANNEX 1 

Draft budget for the European Insurance and Occupational Pensions Authority 

In thousands € 

2011 

2012 

2013 

2014 

2015 

2016 

Title 1 – Staff costs 

4 694 

7 480 

8 770 

10 826 

10 786 

10 786 

Management 

334 

1 002 

1 002 

1 002 

1 002 

1 002 

Senior / expert staff: 

0 

0 

0 

Temporary agents 

1 500 

2 200 

2 700 

3 600 

3 600 

3 600 

Seconded national experts 

1 500 

2 200 

2 700 

3 500 

3 500 

3 500 

Administrative  and  other 
support staff: 

Temporary agents 

Contract agents 

Staff benefits 

Staff training: general 

training:  enhancing 

Staff 
supervisory skills 

Expenditure 
staff recruitment 

relating 

to 

400 

168 

585 

24 

600 

252 

938 

37 

0 

700 

252 

0 

700 

252 

0 

700 

252 

700 

252 

1 103 

1 358 

1 358 

1 358 

44 

54 

54 

54 

135 

198 

243 

320 

320 

320 

48 

53 

26 

41 

0 

0 

–  Building, 
and 

2 

Title 
equipment 
administrative 
expenditure 

Rental  of  buildings  and 
associated costs 

Information 
and 
communication technology 

Movable 
associated costs 

property 

and 

Current 
expenditure 

administrative 

Postage 
Telecommunications 

/ 

1 822 

2 823 

3 324 

4 098 

4 098 

4 098 

828 

1 284 

1 512 

1 864 

1 864 

1 864 

250 

388 

457 

563 

563 

563 

213 

331 

389 

480 

480 

480 

166 

257 

303 

373 

373 

373 

70 

109 

128 

158 

158 

158 

EN 

69 

   EN 

 
  
 
 
 
 
 
 
Meeting 
expenses 

and 

travel 

293 

503 

535 

660 

660 

660 

Title 3 – Operations 

4 071 

4 619 

4 952 

5 070 

5 071 

5 071 

Powers 

Consultations:  stakeholder 
group 

Common 
culture:  participation 
colleges of supervisors 

supervisory 
in 

training 

supervisory 
Common 
culture: 
for 
national  supervisors  and 
staff 
& 
exchanges 
secondments 

Collection  of  information: 
development 
and 
maintenance  of  a  central 
European database 

International 
relations: 
observers  in  international 
supervisory committees 

relations: 
International 
3rd 
cooperation 
countries  on  equivalence 
decisions 

with 

Supervision 
European entities 

of 

pan-

Governance 

Board of Supervisors 

Management Board 

Joint Steering Committee 

Board of Appeal 

216 

216 

216 

216 

216 

216 

40 

40 

40 

40 

40 

40 

500 

1 000 

1 333 

1 500 

1 500 

1 500 

3 000 

3 000 

3 000 

3 000 

3 000 

3 000 

50 

50 

50 

50 

50 

50 

60 

 0 

83 

26 

10 

86 

60 

0 

83 

26 

10 

86 

60 

0 

83 

26 

10 

86 

60 

60 

60 

83 

26 

10 

86 

83 

26 

10 

86 

83 

26 

10 

86 

TOTAL 

10 587 

14 874 

16 998 

19 995 

19 955 

19 955 

Of  which  Community 
contribution 

Of  which  Member  States 
contribution 
(national 
supervisory  authorities  or 
ministries of finance) 

4 235 

5 950 

6 799 

7 998 

7 982 

7 982 

6 352 

8 925 

10 199 

11 997 

11 973 

11 973 

Source: Commission and the L3 Committees, estimates and calculations 

EN 

70 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
ANNEX 2 

Applied  methodology  and  main  underlying  assumptions  for  the  financial  model  of  the 
Authority 

The cost of setting up the European Insurance and Occupational Pensions Authority has been 
estimated  according  to  three  cost  categories:  the  staff  costs,  the  infrastructure  costs  and  the 
operations  costs,  in  line  with  the  general  cost  classification  used  in  accounts  of  the  existing 
EU  regulatory  agencies.  The  total  costs  of  creating  the  EIOPA  has  been  estimated  at  about 
10.587 million Euro in the first year of operations (2011), reaching 16.998 million Euro after 
two years (2013) – see Annex 1. 

It  is  proposed  that  the  Community  budget  funds  40%  of  the  costs  and  Member  States  fund 
60%. The reasons for this proposal are the following: 

•  a well-balanced and mixed financing is the best way to ensure that the Authorities 
act  (and  are  perceived  to  be  doing  so)  independently  from  Member  States  and 
from  the  Community  institutions.  If  one  particular  source  of  funding  were  to  be 
overly dominant, this could cast a shadow on the credibility of the decisions made 
by the Authorities and thus undermine the new framework proposed to safeguard 
financial stability; 

•  given that national supervisors will continue, in this new framework, to carry-out 
the bulk of supervisory activities on the ground, it seems appropriate to reflect this 
in a slightly higher contribution from Member States. In doing so, we would also 
allow  for  a  smooth  evolution  from  the  present  situation  where  the  level  3 
committees are almost exclusively funded by Member States;  

•  however, it is of the essence that a significant part of the funding comes from the 
Community budget. Indeed, the new Authorities will serve objectives which have 
a clear Community dimension: preserving financial stability in the Internal Market 
as  well  as  sustainable  growth  in  the  EU.  Moreover,  one  of  the  Authorities'  core 
tasks  and  powers  is  to  ensure  a  consistent,  efficient  and  effective  application  of 
Community  rules  in  the  sector.  This  justifies,  at  least,  a  40%  funding  from  the 
Community  budget  (as  most  of  these  entities  are  normally  fully  funded  through 
the Community budget). Furthermore, one can doubt whether all Member States 
will  be  able  to  cope  with  the  sharp  increase  in  their  contributions  that  would  be 
required  under  the  new  framework,  which  will  be  much  more  costly  than  the 
present level 3 arrangements.  

•  the need for Community funding is also particularly important to ensure that the 
Authorities are truly independent from Member States. The choice has been made, 
in  order  to  limit  as  much  as  possible  interferences  in  the  technical  work  of 
supervisors,  to  limit  the  Commission's  participation  to  the  minimum  in  the 
supervisory  boards  (with  one  non-voting  member)  and  the  management  boards 
(with  one  voting  member)  of  the  Authorities.  If  there  were  to  be  in  addition  an 
excessive  reliance  on  Member  States'  contributions,  the  credibility  of  the 
Authorities'  independence  would  be  seriously  put  at  risk.  A  significant 
Community  contribution  is  needed  to  compensate  for  the  limited  role  which  is 
being given to the Commission in the decision-making bodies of the Authorities; 

EN 

71 

   EN 

 
•  this approach is the most conducive to a stable funding, with no over reliance on 
one  source  or  on  contributions  from  big  Member  States  who  could  threaten  the 
continued  operation  of  the  Authorities  by  putting  an  end  to  their  financial 
contributions.  Finally,  this  approach  is  also  more  fair  than  a  full  or  very  large 
funding from Member States: national supervisors use a variety of funding models 
at national level - some from general taxation, some from levies on the industry. 
Were the Authority to be predominantly funded by Member States there would be 
a risk of an unlevel playing field across the EU. 

The  staff  cost  estimates  are  based  on  the  assumption  that  the  EIOPA  will  aim  to  double  its 
staff as compared to the staff numbers in the existing Level 3 Committee in the first year of its 
operation.  This  means  an  increase  from  around  20  to  40.  It  has  been  also  assumed  that  the 
number of staff would increase relatively fast in the start-up phase. The authority would hire 
on average 15 new employees per year. It would reach the "cruising speed" with around 90 
staff each.  

The need for increased staffing numbers reflects the significant number of new  tasks which 
the  authority  will  need  to  undertake  in  addition  to  its  previous  responsibilities.  These  new 
tasks  are  outlined  in  detailed  in  the  explanatory  memorandum  which  accompanies  the 
proposed regulations. They include, but are not limited to, developing new technical standards 
in  a  number  of  areas  of  financial  services  legislation,  ensuring  consistent  application  of 
Community rules, settling disagreements between national supervisory authorities, attending 
colleges  of  supervisors  and  facilitating  peer  reviews.  Each  of  these  activities  will  require 
significant  new  resource.  The  detailed  breakdown  of  estimated  staff  numbers  by  various 
categories is presented in Annex 3. 

Another assumption adopted for estimation of the staff costs is that the Staff Regulation of EU 
institutions  would  be  applied  in  all  the  Authorities.  This  is  reflected  –  with  some 
modifications – in per head rates used under Title 1 (see Annex 1 for details). The impact of 
the  locations  of  the  L3  Committees  has  also  been  taken  into  account  (through  the  cost-of-
living multipliers). 

The figures under Title 2 relating to the cost of infrastructure have  been based on the input 
from the existing Level 3 Committees. The CEIOPS provided estimates of their costs in this 
category,  based  on  extrapolation  of  their  real  costs  linked  with  running  offices  and 
administration  in  their  current  locations.  Given  that  Frankfurt  is  a  financial  centre  and  are 
among  the  most  expensive  business  locations  in  the  world,  the  estimated  costs  naturally 
exceed the average levels for the EU regulatory agencies. 

The  operation  costs  are  specific  to  the  competencies  and  the  governance  model  of  the 
European Supervisory Authorities. Regarding powers, various types of activities foreseen for 
the ESFS have been considered in terms of generating extra operational costs apart from the 
general staff costs. It has been possible to attribute such costs to a number of activities, e.g. 
running the stakeholder groups, developing the European supervisory databases, participating 
in the colleges of supervisors, organising training for supervisors from the Member States or 
carrying out on-site inspections of directly supervised companies. The specific costs for these 
operations are very often linked with missions and meetings, but can also include substantial 
expense on outsourced services, e.g. to create and maintain a database or organise trainings.  

On  the  other  hand,  it  has  been  judged  that  many  of  the  ESFS  activities  are  not  linked  with 
extra operational costs and are fully reflected in the general staff costs. These are for example 

EN 

72 

   EN 

 
the development of technical standards, guidelines and recommendations, ensuring consistent 
application of the Community law or the coordination in crisis situations. 

Regarding  the  governance,  the  operational  costs  will  stem  from  activities  of  various  bodies 
foreseen  to  ensure  proper  functioning  of  the  European  System  of  Financial  Supervisors  in 
general and the Authorities in particular: the  Board of Supervisors, the Management Board, 
the Joint Steering Committee and the Board of Appeals.  

The methods of calculating the budget of EIOPA are presented in Table 1. 

Table 1. Estimated budget of EIOPA in the first year of operation (2011) 

40 

Average annual cost per head 
(based on DG BUDG 
guidelines and 3L3 advice) 

In thousands € 

Title 1 - Staff costs 

Total staff: 

Multiplier 
living 

Management 

cost-of-

Frankfurt 

Senior / expert staff: 

Temporary agents 

Seconded national experts 

Administrative and other 
support staff: 

Temporary agents 

Contract agents 

2 

15 

15 

4 

4 

Staff benefits 

15% of total staff costs 

Staff training: general 

amount 
Average 
person (COM data) 

per 

Staff  training:  enhancing 
supervisory skills 

Advice from 3L3 

Expenditure 
staff recruitment 

relating 

to 

3  candidates 
per post on average 

interviewed 

-  Building, 
and 

2 

Title 
equipment 
administrative 
expenditure 

Rental  of  buildings  and  CEIOPS 

data 

and 

1,0 

167,0 

100,0 

100,0 

100,0 

42,0 

0,6 

4,5 

0,8 

4 694

334

0

1 500

1 500

0

400

168

620

24

135

48

1 822

828

EN 

73 

   EN 

 
  
 
  
  
  
  
  
  
  
 
associated costs 

estimates 

Information 
communication 
technology 

and 

CEIOPS 
estimates 

data 

and 

Movable  property 
associated costs 

and 

Current 
expenditure 

administrative 

CEIOPS 
estimates 

CEIOPS 
estimates 

data 

and 

data 

and 

Postage 
Telecommunications 

/ 

CEIOPS 
estimates 

data 

and 

Travel 
expenses 

and  meeting 

CEIOPS 
estimates 

data 

and 

Title 3 - Operations 

-  

Powers 

 Costed activity 

 Assumptions 

 Total cost 

Consultations 

Financial 
Stakeholder Group 

Services 

Common 
culture 

supervisory 

Participation  in  colleges  of 
supervisors 

Common 
culture 

supervisory 

for 
Common 
staff 
supervisors 
exchanges & secondments 

training 
and 

Collection of information 

International relations 

Developing  and  managing 
European 
the 
database 

central 

Contacts with third country 
authorities 
other 
international bodies e.g. for 
equivalence advice 

and 

Supervision 
of 
European entities 

pan-

On site inspections 

One FSSG per each ESA. 30 
members  meeting  4  times  a 
year.  Annual  remuneration 
6000€  per  person.  Industry 
representatives 
be 
reimboursed  for  travel  but 
not remunerated. 

to 

Approximately 25 colleges in 
the  sector.  Participating  in  1 
two  day  meeting  per  year, 
one  EIOPA  rep.  per  meeting 
on average. 

on 

the 

 Based 
amount 
foreseen  for  action  grants  to 
the L3C for 2010-2015  

 CEBS estimate 

11  missions  outside  EU  per 
year for 2 persons. 

Governance 

 Costed activity 

 Assumptions 

 Total cost 

Board of Supervisors 

Decision making 

be 
 26  members 
reimbursed  -  4  meetings  per 

to 

250

213

166

70

293

4 071

216

40

500

3 000

110

 0

83

EN 

74 

   EN 

 
 
 
 
 
 
  
 
Management Board 

Management 

 Joint Steering Committee  Cross-sector cooperation 

Board of Appeal 

Appeals 

year.  

 6  members 
including  4 
representatives  of  national 
supervisors.  Meeting  every 
month, when possible back to 
back with meetings of Board 
of Supervisors.  

Periodic 
chairperson from each ESA  

meetings 

for 

 6  members,  assuming  8 
meetings  per  year, 
and 
annual  remuneration  8000€ 
per person  

TOTAL 

Source: Commission and the L3 Committees estimates and calculations 

26

10

86

10 587

EN 

75 

   EN 

 
  
  
ANNEX 3 

Establishment Plan (preliminary) 

Function group 
and grade 

Posts 

(temporary) 

2011 

2012 

2013 

2014 

AD 16  

AD 15  

AD 14  

AD 13  

AD 12  

AD 11  

AD 10  

AD 9  

AD 8  

AD 7  

AD 6  

AD 5  

1 

1 

1 

2 

6 

10 

6 

3 

2 

1 

1 

1 

5 

15 

25 

15 

7 

7 

AD total  

32 

50 

60 

77 

1 

2 

3 

2 

1 

2 

5 

5 

AST 11  

AST 10  

AST 9  

AST 8  

AST 7  

AST 6  

AST 5  

AST 4  

AST 3  

AST 2  

AST 1  

EN 

76 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AST total  

Total  

8 

40 

12 

62 

13 

73 

13 

90 

Source: Commission 

EN 

77 

   EN