BIIA European Institutional Monitoring 150SUMMARY

Whilst ‘Brexit’ continues to dominate the political discussions in Brussels, the last two weeks has seen the European Commission move forward with its ‘business as usual’ with work on the Green Paper on Retail Financial Services and the final agreement of the EU-US Privacy Shield arrangements.  We have also seen the appointment of the new Commissioner responsible for Financial Services, Valdis Dombrovskis, who has confirmed he will be continuing with the policy programme introduced by his predecessor, Lord Hill. Indeed he is quoted as saying that one policy initiative, the Capital Markets Union is now even more important since the ‘Brexit’ decision.

KEY AREAS OF ACTIVITY

  • JONATHAN HILL HOLDS FINAL EXCHANGE OF VIEWS, DOMBROVKIS TO TAKE OVER FILE

On July 13 Jonathan Hill held a final exchange of views with the EU Economic and Monetary Affairs committee. Commissioner Hill’s resignation as EU commissioner took effect on 15 July 2016.

Latvian commissioner Valdis Dombrovskis, current Vice-President in charge of Euro & Social Dialogue, will take over Hill’s portfolio for Financial Stability, Financial Services and the Capital Markets Union. The UK has nominated Julian King as its next (and likely the last) European Commissioner from the UK, but it is expected that Mr King not receive financial services regulation as part of his portfolio, and this area will remain the responsibility of Commissioner Dombrovskis.

  • IMCO PROPOSES AMENDMENTS TO REPORT ON GREEN PAPER ON RETAIL FINANCIAL SERVICES

On July 13 2016 the EU Internal Market and Consumer Protection (IMCO) committee proposed amendments to the Green paper on retail financial services.

The committee stressed the need for greater consumer trust in financial services and called on the Commission to ensure that existing measures towards improved financial literacy and awareness are fully implemented and further measures are introduced where necessary in order to:

  • empower consumers to make informed decisions
  • increase the transparency of these products
  • remove consumer barriers and unjustified costs to switching or to the withdrawal from a product

They also underlined that the European Standardised Information Sheet (ESIS) and Standard European Consumer Credit Information forms should be systematically given to consumers before an agreement as part of a credit, loan or mortgage estimate.

  • DG FISMA RELEASES SUMMARY OF RESPONSES TO GREEN PAPER ON RETAIL FINANCIAL SERVICES CONSULTATION

On 14 July 2016, the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) released a summary of the responses it received to the Green paper on retail financial services consultation it held.

The summary showed divergent stakeholder opinion on the depth and breadth of data needed to assess consumer creditworthiness. Many consumer organisations wanted to strictly limit data use while companies believed that it was critical for them to have access to a wide range of personal data as well as up-to-date credit registers in each Member State. Opinions were also split between consumer organisations and firms when it comes to the increased use of personal and non-financial data. Banks stressed that personal data would allow them to offer more targeted services to their customers, but consumer groups warned against excessive use of personal data. They suggested that personal data should only be allowed in line with data protection rules and with the consumer’s consent.

The summary of contributions to the Green Paper on retail financial services is available here

  • EUROPEAN COMMISSION ADOPTS EU-US PRIVACY SHIELD

On July 11 2016, the European Commission adopted EU-US Privacy Shield.  Commissioner Věra Jourová stated that the new agreement provides strengthened rights for EU citizens and is based on the following principles:

  • Strong data protection obligations for companies
  • Clear safeguards and transparency obligations for the US government when accessing EU citizens data
  • Stronger redress tools available to individuals, including the Ombudsperson mechanism, the Alternative Dispute resolution, etc.
  • Annual joint review of the functioning of the Privacy Shield

The European Commission will produce a citizens’ guide to explain EU citizens what redress tools are at their disposal and encouraged companies to subscribe as soon as possible to the data sharing mechanism.

The adequacy decision by the European Commission has been notified to the Member States on 12 July and has entered into force already. However, on the US side, Secretary Pritzker stated that companies will be able to certify with the Commerce Department as of 1 August 2016. Commissioner Jourová seemed confident that the Privacy Shield is already designed to be in line with the provisions included in the GDPR and she does not think that there will be a need for further negotiations.

The Press Release from the European Commission is available here.

Regards
Neil Munroe

Neil Munroe is a director of BIIA and a member of the BIIA regulatory committee.  He can be reached at: CRS Insights Ltd – e: neilm@crsinsights.com – m: +44 (0) 7710 844518, p: +44 (0) 1923 284604