Response of the Netherlands – Public consultation on the European Supervisory
Authorities (Regulations 1093/2010, 1094/2010, 1095/2010)
This is a joint reaction of the Netherlands Ministry of Finance, the Dutch Authority for the Financial
Markets and De Nederlandsche Bank, each institution with their own role and responsibilities.

1

General reaction (in answer to Q32: You are invited to make additional comments on the ESAs
Regulation if you consider that some areas have not been covered above.)

First of all, we would like to compliment the European Supervisory Authorities (ESAs) with their
achievements since the start of their operation in 2010, especially in the field of the single
rulebook. We believe the ESAs in general have positively contributed to promoting convergence of
supervisory practices by means of issuing guidelines and recommendations and creating a platform
for exchanging supervisory experiences. Until 2016, the focus of the ESAs was on their regulatory
role. Since then, more attention and resources have been put in enhancing supervisory
convergence between National Competent Authorities.
Integration of markets and supervision is at different stages in the areas of banking (EBA), and
insurance and pensions (EIOPA) and securities markets (ESMA). We thus are taking a differing
approach towards the evaluation of EBA and EIOPA on the one hand, and ESMA on the other hand.
To consider fundamental improvements of the institutional architecture, we feel that the European
supervisory framework at large should be reviewed. In that respect, we would like to take note of
the upcoming review of the Single Supervisory Mechanism (SSM) before giving an in-depth
reaction on the institutional questions.
On EBA and EIOPA, we are content with the current functioning of the organizations and are
supportive to continue these organizations in their current form with their current mandate.
Specifically, given the national character of pension funds (IORPs) in relation to social security and
labour market issues, we do not see a need to move beyond the current framework on this point.
On ESMA, we see that capital markets in the European Union (EU) are increasingly integrated.
Market participants are free to decide where to locate their activities and to offer their services
from any EU member state. These freedoms will be enhanced by the efforts of the European
Commission to accelerate the capital markets union (CMU). CMU will allow for even more cross
border investment and a more efficient allocation of capital, which can boost financing of business
and infrastructure.
One of the current consequences of better integrated capital markets is that national supervision is
increasingly confronted with cross-border financial markets activities. This raises the question
whether national regulators have the capacity to address the risks created by entities under their
supervision outside their jurisdiction, in other EU member states. In order to protect the support
for the current EU passport system for market entities, we should prevent a tendency to lower
standards. We thus believe there is a need to advance ESMAs instruments to enhance supervisory
consistency. We are generally supportive of strengthening ESMA in the area of supervisory
convergence. Much progress in this field can already be made within the framework of the existing
Treaties. Where adjustments are needed in order to effectively fulfill the mandate, the boundaries
of the Meroni-doctrine should be respected as well as the complex system of multileveled (national
versus EU) and inter-institutional governance, of which the democratic credentials are built upon a
subtle, Treaty-established balance.
Looking ahead, as was already done in the ‘Five Presidents’-report of 22 June 2015, a successful
CMU ultimately needs a single European capital markets supervisor. Although first steps have been
taken in the past years, we have not seen a big bang in the area of capital markets as we did see
in the field of banking, with the creation of the Banking Union. There are areas of supervision
where a strong case can be made for more centralised supervision. In our view, market segments
where business is principally European and of a cross border nature, like supervision on
benchmarks and market abuse, are most likely to benefit from more centralised European
supervision. In these market segments more centralised supervision can help reduce market
fragmentation and contribute to a better functioning and more integrated European capital market.
We encourage the Commission move ahead with a single European capital markets supervisor and

2

further explore proposals on supervisory tasks on specific areas that can be organized more
effectively on a European level. The link with national resolution regimes and national resolution
authorities should be taken into account when looking into centralization of supervision.

3

1. In general, how do you assess the work carried out by the ESAs so far in promoting a
common supervisory culture and fostering supervisory convergence, and how could any
weaknesses be addressed?

The ESAs work with regards to supervisory convergence has been instrumental for fostering a
common supervisory culture, as substantial progress has been made since the inception of the
ESAs.
Both the founding regulations of the ESAs and sectoral legislation contain a number of intervention
powers, allowing the ESAs to intervene indirectly or directly in supervisory matters, which are
important to enhance supervisory convergence. There are several important instruments at hand
for the ESAs to put pressure on NCAs which fail to meet their regulatory obligations: peer reviews
of NCA’s, the role of the ESAs in case of a breach of EU law, guidelines and recommendations, and
the settlement of disagreements between NCAs on cross-border issues.
We do not feel that the current framework is substantially lacking competences for EBA and EIOPA,
although we see room within the current legal framework to further promote supervisory
convergence.
We do support the strengthening of ESMA in this area. We acknowledge the work done so far by
ESMA and believe it is time to take next steps to render ESMA future proof. We believe there
should be a strong focus on convergence with a risk based approach. We would like ESMA to
develop instruments that stimulate peer learning by setting up a communal supervisory
methodology, working together in supervisory projects and an advisory function by sharing best /
worst practices Strong action should be taken in order to ensure that practices are corrected where
serious or persistent divergence is detected.

4

2. With respect to each of the following tools and powers at the disposal of the ESAs:
a. peer reviews (Article 30 of the ESA Regulations);
b. binding mediation and more broadly the settlement of disagreements between
competent authorities in cross-border situations or cross-sectorial situations
(Articles 19 and 20 of the ESA Regulations);
c. supervisory colleges (Article 21 of the ESA Regulations);
To what extent:
a.

have these tools and powers been effective for the ESAs to foster supervisory
convergence and supervisory cooperation across borders and achieve the objective
of
having
a
level
playing
field
in
the
area
of
supervision?
Please elaborate on questions and, importantly, explain how any weaknesses could
be addressed.

b.

has a potential lack of an EU interest orientation in the decision making process in
the Boards of Supervisors impacted on the ESAs use of these tools and powers?
Please elaborate on questions and, importantly, explain how any weaknesses could
be addressed.

Peer reviews are a relevant and useful tool for supervisory convergence. It is an effective tool to
show differences in regulation and supervision across the EU and to identify areas where further
regulatory products are needed to converge national practices. We do believe there are some
common principles that should apply when conducting peer reviews:
•
reviews should not only focus on compliance of the procedural aspects of supervision but
specifically take in mind where the largest risks within a market or by an NCA are seen;
•
peer reviews should focus on supervisory practices and avoid becoming a “ticking the box
exercise”;
•
the selection of peer review topics should be in line with the ESA priorities that are selected
in their annual work programmes;
•
peer reviews should ideally be based on clear benchmarks, as to compare NCA’s as
effectively as possible. Also more transparency regarding the outcome of peer reviews
might help in this respect;
•
there could be merit in selecting only a few NCAs to be subject to a peer review, dependent
on the subject or relevant market size;
•
it would be useful to see peer reviews as part of a learning experience for NCAs. The
quality of EU-wide supervision (especially in cross-border situations) might benefit
significantly from mutual understanding of each other’s legal systems and supervisory
modus operandi.
Supervisory colleges:
•
EIOPA plays a facilitating and coordinating role in the supervisory colleges, for instance
with regards to data exchange. The participation of EIOPA in discussions and on-site
inspection helps to foster supervisory convergence across insurance groups.
•
In case of EBA, supervisory colleges seem to be especially useful for identifying areas
where national practices diverge and where there may be a need for trying to reach more
convergence by issuing recommendations or guidelines.
•
ESMA plays a coordinating role in the CCP colleges. With this horizontal role, they have
insight across all the CCPs in the EU. That knowledge is being used e.g. to make
suggestions for EMIR mandatory peer reviews or CCP stress tests. In addition, ESMA will
play a coordinating role in the colleges for critical benchmarks.

5

3. To what extent should other tools be available to the ESAs to assess independently
supervisory practices with the aim to ensure consistent application of EU law as well as
ensuring converging supervisory practices?

We believe in general that EBA and EIOPA have the tools available that are necessary to fulfil their
roles with respect to supervisory convergence and some existing tools could be exploited further.
We see merit in enhancing the use of peer learning instruments.
Specifically on ESMA: We are generally supportive of strengthening ESMA in the area of
supervisory convergence. We see merit in enabling ESMA to take a more initiating role, especially
regarding peer reviews. We also propose adding to the toolkit the possibility of setting up combined
teams, consisting of both NCA- and/or ESMA staff that are able to initiate on-site visits of NCAs.

6

4. How do you assess the involvement of the ESAs in cross-border cases? To what extent are
the current tools sufficient to deal with these cases?

ESMA has some experience with cross border cases. ESMA can step up and make sure there is
enhanced pressure on the NCA(s) involved. We propose adding to the toolkit the possibility of
setting up combined teams, consisting of both NCA- and/or ESMA staff that are able to initiate onsite visits of NCAs.
With respect to EIOPA and EBA, the current tools are deemed sufficient.

7

5. To what extent are the ESAs tasks and powers in relation to guidelines and
recommendations sufficiently well formulated to ensure their proper application? If there
are weaknesses, how could those be addressed?

In general, guidelines and recommendations are very useful. The tasks and powers in relation to
this item are sufficiently well formulated. Given the large amount of legislation that is currently in
place for the financial markets and the implementation needed, we encourage the ESAs to ensure
that quality goes above quantity. We do not think there are any other instruments needed.

8

6. What is your assessment of the current tasks and powers relating to consumer and investor
protection provided for in the ESA Regulations and the role played by the ESAs and their
Joint Committee in the area of consumer and investor protection?

Consideration should be given to a higher profile for consumer/investor protection related issues.
We experience that sector-based regulation is struggling to secure the interconnected and complex
nature of the risks consumers and investors are exposed to. The fact that financial institutions are
operating across bank/insurance/pension lines, and are offering increasingly complex financial
products that have blurred the conventional credit/insurance/securities boundaries, underlines the
need to ensure a cross-sectoral approach to consumer and investor protection.
The Joint Committee so far has played an important role in this work. However, we have noticed
that the governance of the Joint Committee is not optimal for decision making in specific crosssectoral areas. In this regard we welcome the suggestion of the Commission in question 28 to
explore the possible benefits of consolidating certain consumer and investor protection powers
within one European authority. We would like to stress that the goal of reaching a high level of
investor protection goes beyond the institutional organization on a European level.

9

7. What are the possible fields of activity, not yet dealt with by ESAs, in which the ESA’s
involvement could be beneficial for consumer protection?

We would like to refer to our answer to the questions 6 and 28.

10

8. Is there a need to adjust the tasks and powers of the ESAs in order to facilitate their
actions as regards breach of Union law by individual entities? For example, changes to the
governance structure?

On EBA and EIOPA, we are unaware that any changes on this issue are currently deemed
necessary.
On ESMA, we invite the Commission to present proposals to enhance the role of ESMA in this
regard. The outcome of a peer review might for instance show that a national supervisor needs to
change its supervisory practices or has not fully implemented EU legislation. ESMA has several
possibilities to address such an issue, for example by making the outcome of a review public,
‘naming and shaming’, or even to start a so-called Breach of Union Law procedure. But for each of
these specific situations, where ESMA needs to ‘sanction’ one of its members, we face a problem
within the governance. In the current set-up of the ESAs, the ultimate decision-making body is the
Board of Supervisors composed of the Chairs of the national competent authorities. In case ESMA
staff finds a so called Breach of Union Law by one or several of its members, it’s the national
competent authorities themselves that have to take the decision whether to sanction one of their
fellow Board Members.
On governance, we would like to refer to our answer to the questions 22 and 23.

11

9. Should the ESA’s role in monitoring and implementation work following an equivalence
decision by the Commission be strengthened and if so, how? For example, should the ESAs
be empowered to monitor regulatory, supervisory and market developments in third
countries and/or to monitor supervisory co-operation involving EU NCAs and third country
counterparts?

Monitoring regulatory, supervisory and market developments in third countries and supervisory cooperation could provide useful information on whether an equivalence decision should be reviewed.
The ESAs could play a more prominent role in this area.

12

10. To what extent do you think the ESAs powers to access information have enabled them to
effectively and efficiently deliver on their mandates?

It has been beneficial that the ESAs have access to data. It made it possible to have a European
perspective looking at the data, for example for its financial stability task and/or to quickly analyze
the possible consequences of certain market developments. If the ESAs develop information
products (such as data quality reports, peer group comparisons and analytical products for
colleges) and share them with the NCAs, this creates additional value for NCAs.
EIOPA and EBA have sufficient powers in place to access data necessary to fulfill their mandate.
EBA has evolved into a datahub with data from a broad range of European banks available in
comparable format. For instance, EBA receives all regulatory reports for the significant institutions
on quarterly basis (e.g. FINREP, COREP, LR, etc.). Access to data has increased significantly for
EIOPA and EIOPA has evolved into an important data hub for data from insurance companies. This
has helped EIOPA to deliver on their mandates and EIOPA is also working on providing added value
of data to NCAs (for instance by providing benchmarks at European level, identifying risks and
vulnerabilities). EIOPA and EBA are both working on information products that facilitate peer
reviews and the information exchange in supervisory colleges or between home and host
supervisors.
ESMA should play a more central role in the collection of data for securities market activities. This
could be done either by harmonisation, or by NCAs and ESMA working together more closely. A
relevant example of such cooperation is the Delegated Project Boards within ESMA, where NCAs
and ESMA build an infrastructure within ESMA for their MiFID data (FIRDS) and a collective
distribution model for trade repository derivatives data (TRACE). Given the highly relevant role that
data collection and distribution play for securities markets supervision and the efficiency gains that
could be reached, we believe in addressing these tasks on a European level. As such, we can
support the suggestion by the Commission to place data providers (DRSPs) in MiFID 2 under ESMA
supervision.

13

11. Are there areas where the ESAs should be granted additional powers to require information
from market participants?

We would like to make the following remark on whether the ESAs should be empowered to obtain
information directly from market participants. As long as the ESAs do not have a mandate for
engaging in direct supervision of the undertakings, the way for ESAs to require information from
financial undertakings/market participants is through the NCAs. It is important that the NCAs,
which are responsible for direct supervision, always have at least the same information as the
ESAs. The NCA is the most knowledgeable about the undertakings’ situation and should be the one
that communicates with the undertaking. This is the most transparent and efficient way to organize
the data flows, both for the industry as for the NCAs (and the ESAs as well). To have two data
flows brings the risk of overlapping queries to the undertakings, both in terms of delivering data as
in terms of communication about these data (answering questions etc.). Therefore, we do not see
the need to grant the ESAs additional powers to request information from market participants.

14

12. To what extent would entrusting the ESAs with a coordination role on reporting, including
periodic reviews of reporting requirements, lead to reducing and streamlining of reporting
requirements?

Streamlining of reporting requirements has improved considerably. For undertakings that operate
on a European level we do see merits in streamlining and harmonizing the reporting frameworks
and a coordinating role for EBA and EIOPA in reporting frameworks could be beneficial; the SII
reporting framework is a good example of this approach. However, we believe that, given the
current national differences between IORPs and the absence of a European supervisory framework
similar to SII, maximum harmonization of IORP reporting frameworks, is not yet possible.
The reporting framework should be further improved by timely communicating the final version of
the reporting requirements, which could be further strived for. Insight is needed in the cause of the
delay between formal submission by EBA and EIOPA and the final publication of the standards in
the Official Journal of the EU.

15

13. In which particular areas of reporting, benchmarking and disclosure, would there be useful
scope for limiting implementing acts to main lines and to cover smaller details by guidelines
and recommendations?

-

16

14. What improvements to the current organisation and operation of the various bodies do you
see would contribute to enhance enforcement and supervisory convergence in the financial
reporting area? How can synergies between the enforcement of accounting and audit
standards be strengthened?

In our view ESMA significantly contributes to the alignment of supervisory approaches in the
financial reporting area. An important activity in this respect is the establishment of European
common enforcement priorities (ECEP) for financial reporting.
In the past years a high number of accounting issues has been discussed in the European Enforcers
Coordination Sessions (EECS). This sharing of experiences and exchange of views helps to ensure
the convergence of supervisory outcomes in the area of accounting enforcement.
In the medium to long term we support the call for a greater harmonisation of accounting and
auditing practices for financial institutions, as expressed in the Five Presidents’ Report in the
context of building a strong CMU.

17

15. How can the current endorsement process be made more effective and efficient? To what
extent should ESMA’s role be strengthened?

ESMA and EFRAG should both keep playing an important role as advisors in the endorsement
process towards the Commission next to each other.

18

16. What would be the advantages and disadvantages of granting EIOPA powers to approve
and monitor internal models of cross-border groups?

The NCA’s are well equipped to approve and monitor internal models, and they are the most
knowledgeable about the undertaking’s situation. At the same time, also supervisory convergence
in the area of the ex ante approval of internal models of insurance undertakings is warranted for
(not only for cross-border groups). Hence, we would see a role of EIOPA in this respect, for
instance by means of peer reviews and the possibility to give recommendations to the NCA’s
(“comply or explain”). This would however require the build-up of a substantial knowledge base at
EIOPA.

19

17. To what extent could the EBA’s powers be extended to address problems that come up in
cases of disagreement? Should prior consultation of the EBA be mandatory for all new
types of capital instruments? Should competent authorities be required to take the EBA’s
concerns into account? What would be the advantages and disadvantages?

We underline the importance of making sure that the interpretation of compliance with eligibility
criteria by NCA’s is harmonized. However, the benefits of extending the powers of EBA as
suggested in the consultation paper would need to be balanced against its costs, such as potential
delay in the issuance of new capital instruments. Also, we are not aware of any significant
problems in this area that would warrant extending the scope of the powers of EBA. As a final
remark, we note that e.g. the CET1 monitoring reports by EBA already make a significant
contribution towards harmonizing market practice in relation to eligibility criteria. This shows
progress towards more harmonization can also be made without extending formal powers.

20

18. Are there any further areas were you would see merits in complementing the current tasks
and powers of the ESAs in the areas of banking or insurance?
Please elaborate and provide examples.

The value of financial assets can be negatively impacted by environmental, social and governance
related issues. De Nederlandsche Bank has made recommendations to the High Level Expert Group
(HLEG) on sustainable investment to develop and deploy measures to bring sustainability
considerations into mainstream finance.
As ESAs are mandated to identify, at an early stage, trends, potential risks and vulnerabilities
stemming from the micro-prudential level, across borders and across sectors in order to safeguard
financial stability, ESG-related risks could become part of their focus.

21

19. In what areas of financial services should an extension of ESMA’s direct supervisory powers
be considered in order to reap the full benefits of a CMU?

As also stated in our general remark, we see merit in strengthening the European supervisory
framework in order to achieve a real and well-functioning CMU. This would include both more
supervisory convergence work among national supervisors and a strong ESMA with clear
responsibilities. ESMA and the EMIR colleges have already played a positive role in enhancing
supervisory convergence and addressing the risk of regulatory divergence between member states.
We would welcome a further examination by the European Commission on how the current role of
the ESAs, especially ESMA, could be strengthened further in light of this task.
Given the ambitious agenda of the CMU, we encourage the Commission to further explore whether
a number of supervisory tasks and fields could be organized more effectively on a European level
and if so which European authority (ESMA, ECB, other) would be best placed to perform these
tasks. In our view, market segments where business is principally European and of a cross border
nature, like supervision of benchmarks and market abuse, are most likely to benefit from more
centralised European supervision. In these market segments more centralised supervision can help
reduce market fragmentation and contribute to a better functioning and more integrated European
capital market.

22

20. For each of the areas referred to in response to the previous question, what are the
possible advantages and disadvantages?
Please elaborate on your responses providing specific examples.

We would like to refer to our answer to question 19.

23

21. For each of the areas referred to in response to question 19, to what extent would you
suggest an extension to all entities or instruments in a sector or only to certain types or
categories?

We would like to refer to our answer to question 19.

24

22. To what extent do you consider that the current governance set-up in terms of composition
of the Board of Supervisors and the Management Board, and the role of the Chairperson
have allowed the ESAs to effectively fulfill their mandates? If you have identified
shortcomings in specific areas please elaborate and specify how these could be mitigated?

Overall we consider the Boards and Chairpersons to be adequately equipped to perform their tasks
well. The governance structure currently ensures a balanced decision-making process. Naturally,
when more supervisory tasks would be placed at EU level, the governance of ESMA should mature
accordingly.
The ESAs could operate more effectively if the Board of Supervisors would focus more on strategy
and supervisory matters. For the past years the main focus has been on technical regulatory
matters. In our view the ESAs should be able to make this shift in focus, even without changing the
current governance framework.
We do see merit in improving the work of the Joint Committee. As already mentioned in the answer
on question 6, the governance of the Joint Committee is not optimal for decision making in specific
cross-sectoral areas. Approval of each of the three ESAs can be challenging for finalising a
regulatory product.
Furthermore, we would like to draw attention to the fact that the impact of the ESAs`regulatory
role, as well as their activities in the field of supervisory convergence, seem to have increased. In
general, the shifted focus of the ESAs demands increased attention for the accountability of the
ESAs. We think the boundaries of the Meroni doctrine should be respected as well as the complex
system of multilevel (national versus EU) and inter-institutional governance, of which the
democratic credentials are built upon a subtle, Treaty-established balance. In addition to a carefully
designed governance framework, accountability requirements ensure that the Board will be kept
within the Treaty’s established institutional and political limits and that it delivers results true to its
pan-European character.
One last issue specifically concerning the functioning of EBA is the fact that its governance has not
been fully and formally adapted to its recent tasks and responsibilities in the field of bank
resolution. While some form of de facto decision-making has been attributed to the Resolution
Committee in relation to the BoS, there remain legal inconsistencies with the BRRD, which requires
separate powers and decision-making on resolution. The fact that the Resolution Committee
formally cannot decide on Level 2 regulation without BoS involvement currently raises questions
regarding operational independence. In the same vein, the current governance creates practical
inconsistencies, e.g with regard to EBA's mediation role in Resolution Colleges. The current review
offers a good opportunity to review and remedy this situation.

25

23. To what extent do you think the current tasks and powers of the Management Board are
appropriate and sufficient? What improvements could be made to ensure that the ESAs
operate more effectively?

The current tasks and powers of the Management Board are appropriate and sufficient. The ESAs
are member organizations, and a balanced decision-making process, such as is currently the case,
should be ensured. To consider fundamental improvements to the institutional architecture, we feel
that the European supervisory framework at large should first be reviewed. In that respect, we
would also like to take note of the upcoming review of the SSM before giving an in-depth reaction
on the institutional questions.

26

24. To what extent would the introduction of permanent members to the ESAs’ Boards further
improve the work of the Boards? What would be the advantages or disadvantages of
introducing such a change to the current governance set-up?

We would like to refer to our answer to the questions 22 and 23.

27

25. To what extent do you think would there be merit in strengthening the role and mandate of
the Chairperson? Please explain in what areas and how the role of the Chairperson would
have to evolve to enable them to work more effectively? For example, should the
Chairperson be delegated powers to make certain decisions without having them
subsequently approved by the Board of Supervisors in the context of work carried out in
the ESAs Joint Committee? Or should the nomination procedure change? What would be
the advantages or disadvantages?

We would like to refer to our answer to the questions 22 en 23.

28

26. To what extent are the provisions in the ESA Regulations appropriate for stakeholder
groups to be effective? How could the current practices and provisions be improved to
address any weaknesses?

We appreciate the involvement and work done by stakeholders groups.

29

27. To what extent has the current model of sector supervision and separate seats for each of
the ESAs been efficient and effective?

We refer to the answer to question 28.

30

28. Would there be merit in maximizing synergies (both from an efficiency and effectiveness
perspective) between the EBA and EIOPA while possibly consolidating certain consumer
protection powers within ESMA in addition to the ESMA’s current responsibilities? Or should
EBA and EIOPA remain as standalone authorities?

To consider fundamental changes to the institutional architecture, we feel that the European
supervisory framework at large should first be reviewed. In that respect, we would also like to take
note of the upcoming review of the SSM before giving an in-depth reaction on the institutional
questions.
At this stage, we do not immediately see the benefits of a merger of EBA and EIOPA, as we do not
expect significant synergies for their core tasks. From an efficiency point of view, there might be
merit in further concentrating conduct supervision.
Independently of the chosen structure, it is important that consumer and investor protection is
approached in a cross-sectoral and consistent manner. At the same time, the institutional structure
of the ESAs is not so much a goal in itself and should primarily ensure reaching our supervisory
goals in an effective and efficient way. As stated before, a more overarching view on the
institutional set-up of the supervisory architecture in the European Union is – however - necessary
to decide on concentration of conduct supervision at one ESA.

31

29. The current ESAs funding arrangement is based on public contributions. Please elaborate
on each of the following possible answers (a) and (b) and indicate the advantages and
disadvantages of each option.
a) should they be changed to a system fully funded by the industry?
What are the advantages and disadvantages of option a)?
b) should they be changed to a system partly funded by industry?
What are the advantages and disadvantages of option b)?

We stress the importance of the funding levels of the ESAs to be stable and commensurate to what
is necessary, operating efficiently, to effectively fulfill the objectives and tasks set out in their
founding regulations and by other legislation. In addition, the work programmes of the ESAs should
be focused on ensuring resource efficiency as well as effectiveness. In general, we underline the
importance of a transparent and accountable process in building the work programs and setting
priorities.
In light of the above, and regardless of the source of funding (based on public or (partly) industry
financing), the funding model should be consistent with the principles of fair burden-sharing and
budget discipline, aligned to the ESAs' tasks, resources and responsibilities, and with effective
governance and appropriate accountability rules in place.
In case of any alteration of the current funding model, the level of democratic legitimacy and
(political and/or public) accountability of the ESA’s should be taken into account. Furthermore, we
believe that an alteration of the funding system needs to be balanced against the costs. Should the
funding arrangement be changed to a system (partly) funded by the industry, it is necessary to
take the regulatory burden for all parties involved into account.
Naturally, those entities that are under direct supervision of ESMA should directly contribute to its
funding, as is currently the case for Trading Repositories and Credit Rating Agencies.

32

30. In your view, in case the funding would be at least partly shifted to industry contributions,
what would be the most efficient system for allocating the costs of the ESA’s activities?
Please elaborate on (a) and (b) and specify the advantages and disadvantages involved with each
option, indicating also what would be the relevant parameters under each option (e.g., total market
capitalisation, market share in a given sector, total assets, gross income from transactions etc.) to
establish the importance/size of the contribution.

We would like to refer to our answer to question 29.

33

31. Currently, many NCAs already collect fees from financial institutions and market
participants; to what extent could a European system lever on that structure? What would
be the advantages and disadvantages of doing so?
Please elaborate.

We would like to refer to our answer to question 29.

34