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

WASHINGTON — The U.S.-EU Joint Regulatory Discussion board took position on February 7-8, 2023, with participants exchanging views on topics of mutual curiosity as portion of their common economical regulatory dialogue.

EU members bundled representatives of the European Fee, the European Banking Authority (EBA), the European Securities and Marketplaces Authority (ESMA), the European Insurance policies and Occupational Pensions Authority (EIOPA), the European Central Lender (ECB), and the Single Resolution Board (SRB).

U.S. participants provided representatives from the U.S. Section of the Treasury and impartial regulatory businesses, which include the Board of Governors of the Federal Reserve Procedure (FRB), Commodity Futures Investing Fee (CFTC), Federal Deposit Insurance coverage Company (FDIC), Business of the Comptroller of the Currency (OCC), and Securities and Exchange Commission (SEC). U.S. members expressed views on concerns in their respective places of duty.

The Discussion board emphasized close ongoing EU and U.S. cooperation in a vary of parts, and centered on 6 themes: (1) marketplace developments and financial balance threats (2) sustainable finance and weather-similar fiscal dangers (3) regulatory developments in banking and coverage (4) operational resilience and digital finance (5) regulatory and supervisory cooperation in capital markets and (6) anti-income laundering and countering the financing of terrorism (AML/CFT).

The current geopolitical problem, activated by Russia’s unprovoked and unjustified invasion of Ukraine, coupled with uncertainties regarding the international economic outlook and persistent inflationary pressures, exposes the economic procedure to draw back risk equally in the EU and in the U.S. On the other hand, our economic methods have demonstrated to be resilient. International cooperation in monitoring vulnerabilities and setting up resilience towards balance risks remains vital, in the uncertainty about long run geopolitical developments, tightening world wide economical conditions, and the destructive impacts on worldwide electricity and commodities marketplaces.

Contributors discussed issues related to sustainable finance, largely ongoing get the job done on climate and other sustainability-linked economic disclosures and on climate-connected economical hazards. The European Fee introduced the development designed on the implementation of the Sustainable Finance Disclosures Regulation and on the development of European Sustainability Reporting Standards, as mandated under the Company Sustainability Reporting Directive. SEC team talked over the SEC’s proposals to improve disclosures pertaining to issuers’ local weather-associated chance and enrich disclosures by certain money and investment advisers relating to ESG procedures. EU and U.S. individuals agreed to proceed the bilateral trade on sustainability-related disclosures and their engagement in international fora, together with on criteria currently being created by the Global Sustainability Benchmarks Board (ISSB). Discussions also turned to the management of climate-related economic pitfalls, where by both of those sides exchanged on modern developments and initiatives to confirm challenges and administration procedures and problems.

Members from both of those sides also acknowledged the perform currently being performed on sustainable finance and climate-linked economical possibility problems in intercontinental fora, which include at the G20 Sustainable Finance Doing the job Team and the Economical Steadiness Board. The EU provided an update on function at the International System for Sustainable Finance.

Regarding banking, contributors current every other on developments associated to the implementation of Basel III reforms, together with on scope and approach. This was followed by an trade on insurance plan linked topics, wherever the European Fee explained development on the Solvency II evaluate and the proposal for an Insurance policy Restoration and Resolution Directive. A discussion also took position on developments in financial institution resolution in the participants’ respective jurisdictions, as element of their dialogue to facilitate typical cross-border resolution coordination.

Contributors also talked over problems relating to the Overseas Account Tax Compliance Act (FATCA) applicable to citizens and economical companies and the latest U.S. Internal Income Provider temporary relief to foreign monetary institutions for particular pre-present accounts.

With regard to capital markets, participants ongoing their exchanges on monitoring the changeover from panel reference prices and the progress created on their respective legislative and supervisory efforts to market a easy transition away from LIBOR. Members educated just about every other on current developments on funds marketplaces rules. The European Fee offered a condition of enjoy on the negotiations of the evaluation of the Marketplaces in Fiscal Instruments Directive and Regulation, the Directives location out the principles for financial commitment money (covering AIFM and UCITs), and the proposal to amend the European Sector Infrastructure Regulation (EMIR). U.S. SEC personnel gave an update on their the latest proposed policies and amendments relevant to expense cash and equity sector structures.

Contributors also shared views on operational resilience and digital finance. U.S. participants explained U.S. Treasury’s modern report on cloud companies as very well as multilateral work in this space at the FSB and the U.S. Important Suppliers Dialogue. The EU offered an update on the regulation on digital operational resilience (DORA), which has just entered into drive. The conversations also touched upon recent sector developments with regards to crypto-property and updates on regulatory and enforcement efforts in the U.S. and EU relating to crypto-belongings. The exchange also took inventory of conversations close to the developments linked to the possible adoption of central lender digital currencies.

Members also talked over development made in strengthening their domestic AML/CFT frameworks. European Fee workers delivered an overview of recent developments on AML matters, which includes the supranational risk assessment and general public-private partnership advice. U.S. contributors presented an update on the ongoing implementation of the Anti-Dollars Laundering Act of 2020, which includes the Corporate Transparency Act. Participants also discussed the implementation of the vacation rule for cash and crypto-belongings.

Members acknowledged the significance of the Forum in fostering ongoing fiscal regulatory dialogue involving the U.S. and the EU. They agreed that standard conversation on regulatory and supervisory difficulties of mutual problem is necessary to support fiscal steadiness, investor protection, marketplace integrity, and a amount taking part in subject.

Participants will carry on to interact on these topics, as effectively as on other subject areas of mutual desire, ahead of the future Discussion board meeting, which is anticipated to acquire place in Summer 2023.