1. UNI Finance Global Union
Version: Draft 1e
Date: 20/11/2009
UNI Europa Finance Conference, Dublin, Ireland, 10-11 December 2009
Item 08:
Shaping a new regulatory and supervisory
framework for the finance industry
European financial regulation
UNI Europa Finance approach
1 Introduction
With the culmination of the financial crisis in autumn 2008, financial markets have slowly
found their feet again. The biggest financial crisis since 1929 has left taxpayers with a huge
bill and global society with an economic crisis that has serious and damaging impact on
economy and employment.
To avoid mere return to ‘business as usual’, a profound reform and strengthening of the
regulatory and supervisory system at European and world level is needed. UNI finance calls
for a new business model to be developed, which is sustainable, long-term oriented and risk-
conscious, one that empowers customers and staff.
UNI Europa Finance will undertake a strong and focused approach to defend the interests of
finance workers and achieve our objectives. Our policy is based on the UNI Europa Finance
strategy for influencing financial regulation as adopted in 2004.
UNI Europa Finance, together with the other parts of UNI Global Union, works together
closely with the ETUC, TUAC and ITUC. The aim is to have a joint approach on the workers’
side.
2 Key legislation and positions
A comprehensive framework of financial regulation and supervision should be created at
world level to cover all financial products and players in the industry, stop ‘regime shopping’
and ensure that rules are strictly enforced.
UNI Europa Finance has submitted its position to the EU Commission in a number of
consultations. It has had formal and informal meetings with the Commission and with
members of the European Parliament. The work to influence the EU institutions and other
stakeholders will continue and focus on the key priorities outlined below.
The UNI Finance positions are set out in detail in the ‘key issues’ paper adopted in March
2009. In particular at EU level, specific policies have been formulated and communicated to
decision makers.
(see: http://www.uniglobalunion.org/Apps/iportal.nsf/pages/20090324_flp3En).
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2. The UNI Europa Finance Steering Group identified the following six legislative initiatives by
the EU Commission as priorities. UNI Europa Finance will focus its lobbying efforts on these.
2.1 European supervisory architecture.
The EU Commission introduced a package of legislative proposals to strengthen financial
supervision in Europe. The proposed new supervisory structure includes a European
Systemic Risk Board (ESRB) to look after macro-level supervision and a European System
of Financial Supervisors (ESFS), which is to further integrate the micro-level supervision
across Europe.
The proposals are currently dealt with by the European Parliament and the ECOFIN Council,
the Council constellation bring together the EU finance ministers. The Parliament is expected
to vote on its proposed amendments (its opinion) in March 2010 (for the macro-level) and in
June 2010 (for the micro-level).
Key issues for UNI Europa Finance are that employees have a proper place in the new
supervisory architecture, and that the reforms ensure strong, integrated and well-functioning
supervision practices across Europe. The proposal includes consultative bodies
(“stakeholder groups”) to each of the European Supervisory Authorities that would also
include employee representatives. This is a step in the right direction, but key to UNI Europa
Finance is that a balanced representation of stakeholders is ensured in the supervisory
authorities.
2.2 Capital Requirements Directive (CRD) as regards supervisory review of remuneration
structures
In the EU Commission’s draft proposal, the supervisory authorities would have the power to
impose capital 'sanctions' on financial institutions where the remuneration policies are found
to generate unacceptable risk. In an annex to the Directive, principles for good remuneration
policies are outlined (based on the Recommendation on remuneration in the finance sector
adopted 29 April), with which companies will have to comply.
The proposal is currently dealt with by the Parliament and the ECOFIN Council. The
Parliament is expected to adopt its opinion in June 2010.
Key issue for UNI Europa Finance is to ensure that remuneration structures do not hinder
proper advice. At the same time, it must be ensured that the autonomy of the social partners
and the primacy of collective agreements are respected.
2.3 Four regulatory dossiers on responsible sales of financial products
It is key to UNI Europa Finance that proper sales practices are in place across Europe.
Recent initiatives from the Commission regarding responsible sales of financial products
address issues such as conflicts of interest in the sales situations, advice standards and
information provisions. The proposals reflect rules already applying for most investment
products (regulated by the Markets in Financial Instruments Directive, MiFID).
The approach taken by the Commission suggests a move towards harmonisation of sales
regulation in all retail areas of financial services based on MiFID.
UNI Europa Finance is in favour of a single, harmonised approach, introducing the same
advice standards for sales of all types of financial products in the EU.
2.3.1 Responsible lending
Based on consultation earlier this year, the Commission is now considering what measures
to put forward on the issue. A proposal is expected early 2010.
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3. 2.3.2 Retail Investment Products
The Commission’s Communication on Packaged Retail Investment Products aims at an
effective and comprehensive legal framework for retail financial services. The
Communication outlines proposals for a new, horizontal legislative approach, drawing on the
best of existing requirements and applying these to all relevant products.
The Commission will provide an orientation on the detailed legislative proposals by the end
of 2009.
2.3.3 Transposition and implementation of the Consumer Credit Directive
The Consumer Credit Directive was adopted in April 2008 and should be implemented by
June 2010.
It includes standards on information provision but not advice standards. It is part of the
considerations regarding the responsible lending initiatives to revise this Directive to get it in
line with the standards of MiFID.
UNI Europa Finance is in favour of a revision. Furthermore, the transposition and
implementation of the Directive should be more closely monitored at national level.
2.3.4 Review of the Markets in Financial Instruments Directive (MiFID)
A review of the implementation of MiFID is expected early 2010. As mentioned earlier, MiFID
regulates, among other things, advice standards within the investment area.
For UNI Europa Finance, the review is important to gain experience on whether the
legislation has had the intended effect in terms of improving responsible sales of products. It
should be ensured that the advice standards are properly implemented and do not end up as
a formality simply demanding a signature from the customer. A proper implementation is key
to a real improvement of lending practices. A good dialogue with and involvement of finance
employees in the review process is therefore important.
3 Internal roles and responsibilities
3.1 Steering Group and Presidium
The Steering Group is the overall decision-making body to decide on policies and actions. It
plays a key role in encouraging affiliates to act.
The Presidium is the coordination group for financial crisis. It identifies political priorities and
is the main driver behind action.
3.2 The coordination group for regulation
The coordination group stays on top of what is on the regulatory agenda in the EU. It
provides and coordinates input from affiliates to public consultations and meetings with DG
Internal Market. It advises the Steering Group and coordinates the activities together with the
Presidium and the Secretariat. It ensures information flow between the affiliates and the
Secretariat. Together with the Secretariat, it drafts UNI Europa Finance positions on draft
legislation.
3.3 Affiliates
Affiliates are encouraged to use their contacts in the national administration to work with
government positions. They are encouraged to :
• participate actively in the development of UNI Europa Finance’s position – directly as well
as through involvement in the ETUC-UNI Europa expert network (see below),
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4. • identify contacts in the ‘working parties’ of the EU Council and in the Permanent
Representatives Committee (COREPER) as well as among relevant members of the
European Parliament (MEP) from their respective countries,
• organise meetings with key actors,
• keep the Secretariat informed of national developments and their activities.
Affiliates are encouraged to follow up lobbying campaigns at national level and actively
participate in the campaign “Europeans for Financial ReformSecretariat.
3.4 The Secretariat
The Secretariat monitors the regulation and brings affiliates into the process and makes the
link to the coordination group. It identifies targets and timeframes for each legislative
proposal, organises meetings with key targets and addresses other relevant targets.
3.5 ETUC-UNI Europa expert network
ETUC and UNI Europa work together, coordinate activities and pool expertises and
resources. An ETUC-UNI Europa expert network has been formed. Its task is to develop
counter-proposals to the regulatory proposals from the Commission from a technical
perspective.
The network consists of internal and external experts of the two organisations, in particular
from UNI Europa Finance.
Results will be fed into the UNI Europa Finance decisionmaking process.
UNI Europa Finance and ETUC coordinate the work of the network.
3.5.1 Europeans for Financial Reform
UNI Europa Finance is part of the campaign network Europeans for Financial Reform, which
brings together a number of like-minded organisations in favour of financial reform. The main
participants are Global Progressive Forum, UNI Europa, TUAC, ETUC, ITUC, and Solidar.
The campaign is a joint effort between Europe and an established alliance of over 80
organisations in ‘Americans for Financial reform’ including many UNI US affiliates. The
purpose is to develop a transatlantic alliance for financial reform. UNI Global Union is
represented on the steering committee. The campaign was launched officially on 21
September 2009 in Brussels. UNI is now involved in promoting the campaign to affiliates and
outside groups.
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