Joint Statement on the U.S.-EU Financial Regulatory Forum

WASHINGTON — The U.S.-EU Joint Regulatory Forum took area on February 7-8, 2023, with individuals exchanging sights on subject areas of mutual desire as section of their frequent economical regulatory dialogue.

EU members included representatives of the European Fee, the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), the European Insurance coverage and Occupational Pensions Authority (EIOPA), the European Central Bank (ECB), and the Single Resolution Board (SRB).

U.S. contributors integrated reps from the U.S. Office of the Treasury and unbiased regulatory organizations, which include the Board of Governors of the Federal Reserve Method (FRB), Commodity Futures Buying and selling Commission (CFTC), Federal Deposit Insurance Company (FDIC), Office of the Comptroller of the Forex (OCC), and Securities and Exchange Fee (SEC). U.S. members expressed sights on difficulties in their respective spots of accountability.

The Forum emphasised shut ongoing EU and U.S. cooperation in a range of spots, and centered on six themes: (1) market place developments and monetary balance dangers (2) sustainable finance and weather-similar fiscal dangers (3) regulatory developments in banking and insurance (4) operational resilience and electronic finance (5) regulatory and supervisory cooperation in money markets and (6) anti-dollars laundering and countering the funding of terrorism (AML/CFT).

The current geopolitical problem, brought on by Russia’s unprovoked and unjustified invasion of Ukraine, coupled with uncertainties relating to the global economic outlook and persistent inflationary pressures, exposes the economical process to draw back risk each in the EU and in the U.S. Nevertheless, our financial programs have demonstrated to be resilient. International cooperation in monitoring vulnerabilities and making resilience versus security threats remains vital, in the uncertainty close to potential geopolitical developments, tightening world-wide financial disorders, and the adverse impacts on worldwide electrical power and commodities marketplaces.

Participants talked about concerns similar to sustainable finance, mainly ongoing do the job on local weather and other sustainability-similar money disclosures and on weather-similar financial threats. The European Commission introduced the development manufactured on the implementation of the Sustainable Finance Disclosures Regulation and on the growth of European Sustainability Reporting Requirements, as mandated less than the Corporate Sustainability Reporting Directive. SEC personnel discussed the SEC’s proposals to enrich disclosures with regards to issuers’ weather-connected hazard and enhance disclosures by specified cash and financial investment advisers relating to ESG methods. EU and U.S. contributors agreed to continue on the bilateral exchange on sustainability-related disclosures and their engagement in international fora, such as on criteria currently being produced by the Global Sustainability Criteria Board (ISSB). Discussions also turned to the administration of climate-related economical threats, the place both equally sides exchanged on recent developments and initiatives to ascertain hazards and administration practices and challenges.

Contributors from equally sides also acknowledged the perform becoming completed on sustainable finance and local weather-connected monetary danger challenges in worldwide fora, such as at the G20 Sustainable Finance Doing the job Group and the Financial Stability Board. The EU delivered an update on do the job at the International System for Sustainable Finance.

Relating to banking, participants up to date each individual other on developments connected to the implementation of Basel III reforms, such as on scope and method. This was adopted by an trade on insurance coverage associated topics, in which the European Commission explained development on the Solvency II critique and the proposal for an Insurance coverage Restoration and Resolution Directive. A discussion also took spot on developments in financial institution resolution in the participants’ respective jurisdictions, as portion of their dialogue to facilitate standard cross-border resolution coordination.

Contributors also talked about problems relating to the International Account Tax Compliance Act (FATCA) suitable to citizens and money companies and the the latest U.S. Interior Revenue Assistance short term reduction to foreign financial establishments for specific pre-present accounts.

With regard to funds marketplaces, contributors continued their exchanges on checking the transition from panel reference charges and the development produced on their respective legislative and supervisory endeavours to encourage a clean transition absent from LIBOR. Participants knowledgeable each and every other on current developments on money marketplaces regulations. The European Commission offered a point out of enjoy on the negotiations of the review of the Marketplaces in Money Devices Directive and Regulation, the Directives setting out the rules for financial investment money (covering AIFM and UCITs), and the proposal to amend the European Current market Infrastructure Regulation (EMIR). U.S. SEC team gave an update on their recent proposed procedures and amendments relevant to investment decision money and equity industry structures.

Members also shared sights on operational resilience and digital finance. U.S. members explained U.S. Treasury’s recent report on cloud expert services as properly as multilateral operate in this area at the FSB and the U.S. Crucial Suppliers Dialogue. The EU presented an update on the regulation on electronic operational resilience (DORA), which has just entered into pressure. The conversations also touched upon recent industry developments regarding crypto-belongings and updates on regulatory and enforcement initiatives in the U.S. and EU relating to crypto-property. The exchange also took inventory of conversations about the developments associated to the possible adoption of central lender digital currencies.

Individuals also reviewed progress made in strengthening their domestic AML/CFT frameworks. European Commission staff provided an overview of new developments on AML matters, including the supranational chance evaluation and public-private partnership advice. U.S. contributors offered an update on the ongoing implementation of the Anti-Income Laundering Act of 2020, including the Company Transparency Act. Participants also talked over the implementation of the journey rule for resources and crypto-assets.

Members acknowledged the relevance of the Discussion board in fostering ongoing economic regulatory dialogue in between the U.S. and the EU. They agreed that regular communication on regulatory and supervisory difficulties of mutual issue is needed to assistance financial balance, trader protection, current market integrity, and a degree actively playing discipline.

Contributors will go on to engage on these topics, as effectively as on other topics of mutual fascination, in advance of the subsequent Discussion board meeting, which is envisioned to consider location in Summer 2023.