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The Swedish government fleshed out its priorities regarding financial regulation during its six months at the helm of the rotating presidency of the EU Council, in a presentation for member states’ financial attachés, seen by EURACTIV.
The presentation focuses on rules that aim to tackle money laundering and the financing of terrorism.
In 2021, the European Commission proposed the so-called anti-money laundering and countering the financing of terrorism (AML/CFT) package, including a legislative proposal for a single AML/CFT rulebook and a proposal to set up a European authority for AML and CFT.
Member states agreed on a common negotiating position on the single rulebook in December 2022. Now, the Swedish presidency wants to start and advance discussions with the European Parliament, according to the presentation.
Moreover, it wants to “focus progress on the new AML authority”, on which the EU member states already have a partial agreement. The only thing they have not been able to agree on is where in the EU the authority should be based. The European Parliament, meanwhile, has not yet agreed on a position.
Some ambition for the Capital Markets Union
The Swedish presidency of the EU Council would also like to push for a further integration of the Capital Markets Union (CMU). There are many ongoing negotiations between member states and the European Parliament in this field.
The European Green Bond Standard (GBS), for example, should define which financial products can be labelled as green bonds to guarantee the integrity of the designation and prevent greenwashing. Parliament and member states have not agreed on a common position, however.
The same is the case for the European Single Access Point (ESAP). The aim of this proposal is to create a single point of access to public financial and sustainability-related information about EU companies and EU investment products.
Other legislative files currently being negotiated between member states and the EU Parliament are the amendments to the directive relating to undertakings for collective investment in transferable securities (UCITS), that covers mutual funds, and the alternative investment funds manager directive (AIFMD), that covers hedge funds and private equity.
Amendments to the markets in financial instruments regulation (MiFIR), that regulates investment services, are also under review between the two legislative bodies of the EU.
The Swedish presidency’s CMU push takes up the baton from the European Commission, which proposed three legislative changes in December to further the integration process.
The presidency explicitly mentions the Listing Act as an issue on which it wants to progress. With the Listing Act, the Commission wants to make it less burdensome and expensive for SMEs to get listed on the stock market, with the broader aim to push European companies more towards equity funding instead of relying on the traditional bank loans.
Financial stability
Financial stability issues are also on the menu, both for banks and insurances.
Regarding banks, the capital requirements directive as well as the capital requirements regulation are in the spotlight. The economic committee of the European Parliament is set to vote to agree on a common negotiating position on 24 January.
While this does not leave too much time, the Swedish Presidency has set itself the goal of reaching a political agreement with the European Parliament before the end of June.
As discussions in the Parliament on capital requirements for insurance companies in the Solvency II directive are not too far along yet, due to fights over the inclusion of sustainability criteria, the Swedish presidency cannot be expected to bring the directive to a close before July.
Regarding payments, meanwhile, the Swedes have set themselves the goal to reach a common position among member states on the instant payments regulation. The Commission had proposed this regulation in October 2022 to promote the availability of euro-denominated instant payments.
Luca Bertuzzi contributed to the reporting.
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