As a senior member of both the European Parliament’s ECON committee and the Delegation for Relations with the United States, I take a very close interest in the issue of convergence of regulation between the EU and US, particularly in the area of financial services.

My office has conducted an audit of the differences that have emerged in 12 critical areas, details available here: http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-83ABC83D-68279FF2/bst_engl/xcms_bst_dms_32455_32456_2.pdf

Going forward, I am committed to trying to achieve greater transtlantic convergence, which will result in improved oversight of providers of financial services, less opportunity for regulatory arbitrage, and ultimately reduced costs for consumers as barriers to competition are reduced.

Yesterday in Strasbourg MEPs voted in favour of my report on the creation of a new European authority for overseeing the activities of cross-border insurers and occupational pensions providers by a massive margin: 597 in favour, with only 29 against (photo, right: press conference following the vote).

I have previously posted on the purpose and activities of the new body, known as EIOPA, so I won’t go into that here. But I would note that such is the need for this new body that even arch-eurosceptic, and #1 Tory South East MEP, Daniel Hannan (he of the NHS is a ’60 year mistake’ fame), voted in favour.

Still, you can always rely on UKIP to do the worst for the UK’s interests. To form, they all voted against. Indeed, William Legge, 10th Earl of Lord Dartmouth, and a UKIP MEP, took the time to object to the creation of the new authority, prior to the vote yesterday. You can see his point of order, and my response here – http://www.youtube.com/watch?v=Xk2HBjg5Qtw (Thanks Lord Dartmouth for posting this, and to all of your supporters for the erudite comments underneath).

To see the full hour long discussion prior to the vote click here – http://news.bbc.co.uk/democracylive/hi/europe/newsid_9017000/9017067.stm

Last week the European Parliament reached agreement with national governments and the European Commission on the creation of a new European supervisory architecture for financial services.

I was one of the five MEPs on the Parliament’s negotating team (see photo, right, of trialogue negotiations), my chief responsibility being for the creation of the new European Insurance and Occupational Pensions Authority. It was a hard slog. In the end we had around 25 trialogues, which is the technical term for the negotiations. I believe that must be quite near a record!

The reason why the negotiations were so ardeous was that the legislation is so important and far-reaching. The purpose is to prevent another breakdown of communications between national supervisory authorities, as occurred between the UK, Iceland and the Netherlands over Icesave, or between the Belgian and Dutch authorities over Fortis.

I won’t go into all the details on the powers of the new authorities here,  interested readers can find out more at – http://www.europarl.europa.eu/news/expert/infopress_page/042-80951-245-09-36-907-20100902IPR80950-02-09-2010-2010-false/default_en.htm

Suffice to say that all parties came out of the negotiations fairly happy with the outcome. The powers of the new supervisory authorities are concorrent with the roles bestowed upon them. National governments retain ultimate responsibility, as should be the case given that they are the ones responsible to tax-payers for bail-outs. However, the new bodies have enough teeth to help overcome some of the problems witnessed during the last crisis. I am very pleased with the result.

News from Peter Skinner MEP

ISSUED BY PETER SKINNER, LABOUR MEP FOR THE SOUTH EAST REGION

 Peter Skinner MEP , 99 Kent Road, Dartford DA1 2AJ

Tel: 01322 270345 , Mobile: 07976 969912

For immediate release                          Wednesday, 26 March 2010

Alternative funds – European exceptionalism could undermine G20 commitments

Moves to go beyond internationally agreed standards for alternative funds could undermine commitments made at the G20 to co-ordinate the global regulatory response to the financial crisis, warns British Labour MEP Peter Skinner.

It also is likely to result in a backlash from the US, harming the interests of EU investors and industry, he adds.

Skinner, a senior member of the European Parliament’s ECON committee, raised his concerns at a press conference on the Alternative Investment Fund Manager’s Directive (AIFMD) attended by leading MEPs from the major UK parties and European Parliament’s rapporteur for AIFMD Jean Paul Gauzes.

“There is a cold draft of protectionism flowing through the European Council that has seeped into parts of the European Parliament’s draft text on AIFMD,” says Skinner, referring to the current proposals on funds and fund managers in third-countries.

“This will not only ultimately harm the interests of EU citizens, but will seriously damage efforts beyond alternative funds to achieve trans-Atlantic – and therefore global – consensus on re-regulating the financial sector,” say Skinner. “It will also lead to retaliatory action from the US, of which we are already seeing some signs,” he adds.

Skinner is specifically concerned over the possibility that AIFMD will either deny funds and fund managers from third-countries such as the US the possibility of marketing across the EU, or set ‘equivalence’ requirements so high on them doing so as to be almost impossible to meet.

“I believe that current efforts by France in the European Council to deny third-country funds the possibility of passporting across the EU are more about protecting and nurturing the French funds industry than doing what’s best for European investors and business,” says Skinner.

“The current Parliament text is a slight improvement since it foresees the granting of passports to third country fund managers who meet equivalence, however the great concern I have is that equivalence will be interpreted as having to follow the letter of AIFMD, rather than the spirit.”

“The purpose of AIFMD ultimately is monitor and reduce the systemic risk posed by alternative funds, and increase investor protection. International standards, such as those being proposed by IOSCO, achieve these goals. So if a third-country meets IOSCO standards it should be declared as having equivalence with the EU and funds and managers domiciled in that third-country the option to passport across the EU.”

“I am far from being alone among MEPs in holding these views. Over the coming weeks we intend to put pressure on the rapporteur to take a more open and reasonable approach on the issue of third countries, for the benefit of all European citizens,” says Skinner.

ENDS