European Commission to investigate possibility of levy to fund EIOPA
The European Commission has backed calls for the European Insurance and Occupational Pensions Authority (EIOPA) to no longer be funded from the European Union’s budget, increasing the likelihood of an industry levy.
The European executive recommended the changes as it endorsed reviews of both the European Systemic Risk Board (ESRB) and the European Supervisory Authorities (ESA) for banking, securities markets and the pension and insurance industry.
The review noted concerns that the current approach to ESA funding – whereby a budget is provided by the EU and through grants from the national regulators – could prove unsustainable as the supervisors looked to increase staffing levels.
“Given EU and national budget constraints, the Commission considers that a revision of the existing funding model should therefore be envisaged,” the review said.
It went on to note that the new model would “ideally” abolish the current funding model and that the Commission would start preparatory work to “improve the funding arrangements of the ESAs so they could fulfil their mandate”.
“Further analysis could be carried out to assess the possibility of different funding models for the ESAs, including by increasing the level of funding by raising fees and levies,” it added.
Gabriel Bernardino, chairman of EIOPA, last year called for greater funding to attract further staff, a call backed by the European Parliament’s economic and monetary affairs committee (ECON).
The Commission said that, in light of the proposed Banking Union, it would also consider either relocating the ESAs and ESRB to have a single seat.
EIOPA is currently based in Frankfurt, the European Securities and Markets Authority in Paris and the European Banking Authority in London.
The Commission said it would also consider whether a “Twin Peaks” approach to regulation should be implemented, with a single prudential regulator and a second to police the industry.
The review further suggested changes to the way ESA stakeholder groups are composed, increasing transparency and suggesting that those appointed should be chosen in a more “balanced” way – potentially by increasing the number of consumer and small and medium-sized enterprise (SME) representatives.
The 30-strong occupational pensions stakeholder group (OPSG) currently consists of 10 representatives from the pension industry, employers, employees, professional bodies, academics and a sole representative for SMEs.
The OPSG last year appointed Benne van Popta as its chairman.