On 29 May 2020 the European Securities and Markets Authority ("ESMA") announced the winding down of its Supervisory Coordination Network ("SCN").

However, as we consider below, supervisory convergence remains a key priority for ESMA.

Role of the SCN

The SCN was established in May 2017 to help mitigate the risks to supervisory convergence from Brexit. 

While ESMA recognised that financial centres in the EU27 were free to compete based on the strengths they can offer firms relocating from the UK as a result of Brexit, it was keen to ensure that the EU rulebook was always applied consistently.

The SCN provided a forum for reporting and discussions among national competent authorities ("NCAs") regarding market participants seeking to relocate entities, activities or functions to the EU27 post Brexit.  Its main objective was to promote sound, efficient and consistent supervision across the EU. 

In addition, the SCN discussed the relocation cases of firms, activities or functions into the EU27 before authorisations were granted. 

The SCN facilitated open discussions and allowed supervisors reach practical common supervisory solutions.  These solutions complemented ESMA guidance through other convergence tools such as Q&As.    

Time Up

As the Brexit Withdrawal Agreement entered into force on 31 January 2020, the work of the SCN is coming to an end. 

The SCN is due to hold a final meeting before the end of 2020 to take stock of the relocation situation and close its work.

Supervisory Convergence Remains a Priority 

While the SCN is not being repurposed for other projects now the wave of Brexit relocations has passed, EU supervisory convergence remains a key priority for ESMA, as noted in its revised annual work programme released on 15 June 2020. 

Focus on Costs

One of ESMA's supervisory convergence priorities for 2020 relates to achieving a common interpretation of rules in the area of investor protection, including cost and performance. 

We have seen an example of this already in the form of the new guidance on fund costs reporting. For further details see our previous client update covering ESMA’s Pricing Process

Further Information

If you would like further information, please liaise with the below or your usual Maples Group contact.

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CONTACTS

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Peter Stapleton

Partner

+353 1 619 2024

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Stephen Carty

Partner

+353 1 619 2023

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Ian Conlon

Partner

+353 1 619 2714

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Ronan Cremin

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+353 1 619 2756

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John Gallagher

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+353 1 619 2073

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Philip Keegan

Partner

+353 1 619 2122

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Deirdre McIlvenna

Partner

+353 1 619 2064

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Aaron Mulcahy

Partner

+353 1 619 2104

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Eimear O'Dwyer

Partner

+353 1 619 2065

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Niamh O'Shea

Partner

+353 1 619 2722

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Emma Conaty

Head of Global Registration Services

+353 1 619 2708

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Adam Donoghue

Partner

+44 20 7466 1711

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Pádraig Brosnan

Partner

+1 345 814 5441

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Michelle Lloyd

Partner

+852 3690 7504

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Johan Terblanche

Managing Partner

+352 28 55 12 44

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Michelle Barry

Associate

+352 28 55 12 47

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