Issue No. 21
Our quarterly overview of legislative and regulatory developments in the European Union.
Any suggestion that we would see a gentle winding down of activity in the final quarter of 2019 were quickly put to rest, with a number significant political and legislative developments, despite the new European Commission only formally taking office on 1 December.
The process for approving the new College of Commissioners as well as the next Executive Director of the European Banking Authority has shown that appointments to top jobs within the European Union (EU) will be subject to a high degree of scrutiny.
On the legislative side and sustainable finance, the Council and the European Parliament reached a political agreement on the taxonomy proposal, which seeks to establish a classification system for sustainable economic activities. The focus will now shift to finalisation of Level 2 measures, where most of the details will be specified. Elsewhere, the EU continues to lay groundwork for the review of the MiFIDII framework, including the EU-wide consolidated tape, as well as engaging with external stakeholders to determine its approach towards FinTech.
On Brexit, by the time of publication, Phase One will be completed and the United Kingdom (UK) will have formally exited the EU. In practice, due to the transition period until 31 December 2020, which maintains the regulatory status quo, not much will change for firms. However, close attention will be paid to Phase Two, in which the EU and UK will have the difficult task of establishing a free trade agreement. Also, both sides will be undertaking relevant equivalence assessments under existing legislation during that period. So, even after Brexit, the EU-UK relationship still has many challenges ahead.