Annexes to COM(2023)279 - Amendment of Directives (EU) 2009/65/EC, 2009/138/EC, 2011/61/EU, 2014/65/EU and (EU) 2016/97 as regards the Union retail investor protection rules - Main contents
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| dossier | COM(2023)279 - Amendment of Directives (EU) 2009/65/EC, 2009/138/EC, 2011/61/EU, 2014/65/EU and (EU) 2016/97 as regards the Union retail ... |
|---|---|
| document | COM(2023)279 |
| date | May 24, 2023 |
3.2.4. Compatibility with the current multiannual financial framework
- The proposal/initiative is compatible the current multiannual financial framework.
- The proposal/initiative will entail reprogramming of the relevant heading in the multiannual financial framework.
Explain what reprogramming is required, specifying the budget lines concerned and the corresponding amounts.
The EIOPA <03 10 03> and ESMA <03 10 04> budget lines will need to be reprogrammed to provide for the additional appropriations identified in section 3.2.1
- The proposal/initiative requires application of the flexibility instrument or revision of the multiannual financial framework52.
Explain what is required, specifying the headings and budget lines concerned and the corresponding amounts.
N/A
3.2.5. Third-party contributions
- The proposal/initiative does not provide for co-financing by third parties.
- The proposal/initiative provides for the co-financing estimated below:
EUR million (to three decimal places)
| 2023 | 2024 | 2025 | 2026 | 2027 | Total | |
| Estimate of costs covered by NCA Contributions | 1.320 | 1.020 | 0.884 | 3.224 | ||
| TOTAL appropriations co-financed (including employer’s pension contributions) | 1.320 | 1.020 | 0.884 | 3.224 |
3.3. Estimated impact on revenue
- The proposal/initiative has no financial impact on revenue.
- The proposal/initiative has the following financial impact:
- on own resources
- on other revenue
- please indicate, if the revenue is assigned to expenditure lines ◻
EUR million (to three decimal places)
| Budget revenue line: | Appropriations available for the current financial year | Impact of the proposal/initiative53 | ||||||
| Year N | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | ||||
| Article …………. |
For miscellaneous ‘assigned’ revenue, specify the budget expenditure line(s) affected.
Specify the method for calculating the impact on revenue.
Appendix to the Legislative Financial Statement
General Assumptions:
- Legislation enters into force in 2025.
- The cost of additional staff expenditure (Title 1) has been calculated using the average staff costs applicable from January 2023 of EUR 142 000 per Temporary Agent and EUR 62 000 per Contract Agent (i.e., the total standard average costs per Temporary Agent and per Contract Agent after subtracting the standard EUR 29 000 cost for the building and IT costs associated with additional FTEs, known as ‘habillage’).
The current correction coefficients applicable for EIOPA in Frankfurt (100.6) and ESMA in Paris (116.8) were applied to these standard costs, which were then indexed at 2% from 2024 (as is standard practice when programming the Union budget on the basis that that in some years inflation may be less and in others it may be more).
- The cost of additional infrastructure and operating expenditure (Title 2) has been calculated by applying the EUR 29 000 standard ‘habillage’ cost of building and IT per FTE applicable to LFS calculated in 2023 plus a standard cost allowance of EUR 2 500 per FTE for other administrative costs not covered by the ‘habillage’ allocation (i.e. EUR 31 500 per FTE). As for the Title 1 staff expenditure costs, the EUR 31 500 per FTE has been indexed at 2% as from 2024.
Justification for the levels of resources requested (staff and operational costs)
Requested resources are necessary for the performance of the following tasks by EIOPA and ESMA:
1. Technical advice by ESMA and EIOPA for the development of an EU template for costs disclosures under MiFID II and IDD
2. ESMA and EIOPA to develop guidance on the use of “vital information” in marketing communications under MiFID and IDD
3. Technical advice by ESMA and EIOPA for the criteria for “value for money” assessment, including the methodology for comparisons (benchmarks) and compilation of information for such benchmarks (both for distributors and manufacturers)
4. Data gathering on costs and performance of retail investment products (for the purposes of compiling benchmarks)
5. Development and updating, where necessary, of reporting templates
6. Empower ESMA and EIOPA to impose on firms the systematic use of risk warnings
7. The setting up and running of collaboration platforms by ESMA (and EIOPA)
8. NCAs would be required to report consolidated data on cross-border activity to EIOPA. EIOPA would be mandated to produce a limited but insightful and harmonised reporting of cross border activities.
These will be new tasks for EIOPA and ESMA. Both ESMA and EIOPA are planning to redeploy current FTE’s to some of the tasks (4 and 1.3 FTEs respectively). However, resource needs corresponding to the envisaged tasks cannot be fully covered by reallocation of existing staff or already planned operational expenditure. It is estimated that both ESAs will need to assume those tasks as of 2025.
Due to temporary nature of tasks 1, 2, 3, 5, 6, 8 primarily Contract Agent posts were envisaged for their performance.
Certain efficiency gains have been factored in as a result of grouping the following tasks:
- tasks 1, 2, 6
- tasks 3, 5, 8
- tasks 4, 7
which can be performed by the same personnel either simultaneously or in a sequential manner.
Personnel and IT budgets for task 4 (data gathering on costs and performance of retail investment products) are significantly higher for ESMA as it is expected to perform the task on a larger scale (gather information on a greater number of products).
Procurement costs for consumer testing have been estimated at 500,000 EUR for EIOPA and ESMA each, with synergies possible should a joint procurement procedure be pursued.
Estimated NCA cost for activities to be conducted by EIOPA
EUR million
| EIOPA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.072 | 0.147 | 0.202 | 0.421 | ||
| Payments | (2) | 0.072 | 0.147 | 0.202 | 0.421 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.019 | 0.039 | 0.050 | 0.108 | ||
| Payments | (2a) | 0.019 | 0.039 | 0.050 | 0.108 | |||
| Title 3: operational expenditure | Commitments | (3a) | 0.486 | 0.180 | 0.090 | 0.756 | ||
| Payments | (3b) | 0.486 | 0.180 | 0.090 | 0.756 | |||
| TOTAL appropriations | Commitments | =1+1a +3a | 0.577 | 0.366 | 0.342 | 1.285 | ||
| Payments | =2+2a +3b | 0.577 | 0.366 | 0.342 | 1.285 |
Estimated NCA cost for activities to be conducted by ESMA
EUR million
| ESMA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.164 | 0.335 | 0.342 | 0.841 | ||
| Payments | (2) | 0.164 | 0.335 | 0.342 | 0.841 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.039 | 0.079 | 0.080 | 0.198 | ||
| Payments | (2a) | 0.039 | 0.079 | 0.080 | 0.198 | |||
| Title 3: operational expenditure | Commitments | (3a) | 0.540 | 0.240 | 0.120 | 0.900 | ||
| Payments | (3b) | 0.540 | 0.240 | 0.120 | 0.900 | |||
| TOTAL appropriations | Commitments | =1+1a +3a | 0.743 | 0.654 | 0.542 | 1.939 | ||
| Payments | =2+2a +3b | 0.743 | 0.654 | 0.542 | 1.939 |
Estimated NCA cost for activities to be conducted by EIOPA and ESMA
EUR million
| EIOPA and ESMA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.236 | 0.482 | 0.544 | 1.262 | ||
| Payments | (2) | 0.236 | 0.482 | 0.544 | 1.262 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.058 | 0.118 | 0.130 | 0.306 | ||
| Payments | (2a) | 0.058 | 0.118 | 0.130 | 0.306 | |||
| Title 3: operational expenditure | Commitments | (3a) | 1.026 | 0.420 | 0.210 | 1.656 | ||
| Payments | (3b) | 1.026 | 0.420 | 0.210 | 1.656 | |||
| TOTAL appropriations | Commitments | =1+1a +3a | 1.320 | 1.020 | 0.884 | 3.224 | ||
| Payments | =2+2a +3b | 1.320 | 1.020 | 0.884 | 3.224 |
Estimated total cost (EU and NCA) for activities to be conducted by EIOPA
EUR million
| EIOPA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.114 | 0.232 | 0.319 | 0.665 | ||
| Payments | (2) | 0.114 | 0.232 | 0.319 | 0.665 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.032 | 0.065 | 0.083 | 0.180 | ||
| Payments | (2a) | 0.032 | 0.065 | 0.083 | 0.180 | |||
| Title 3: operational expenditure | Commitments | (3a) | 0.810 | 0.300 | 0.150 | 1.260 | ||
| Payments | (3b) | 0.810 | 0.300 | 0.150 | 1.260 | |||
| TOTAL appropriations | Commitments | =1+1a +3a | 0.956 | 0.597 | 0.552 | 2.105 | ||
| Payments | =2+2a +3b | 0.956 | 0.597 | 0.552 | 2.105 |
Estimated total cost (EU and NCA) for activities to be conducted by ESMA
EUR million
| ESMA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.262 | 0.533 | 0.544 | 1.339 | ||
| Payments | (2) | 0.262 | 0.533 | 0.544 | 1.339 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.065 | 0.131 | 0.133 | 0.329 | ||
| Payments | (2a) | 0.065 | 0.131 | 0.133 | 0.329 | |||
| Title 3: operational expenditure | Commitments | (3a) | 0.900 | 0.400 | 0.200 | 1.500 | ||
| Payments | (3b) | 0.900 | 0.400 | 0.200 | 1.500 | |||
| TOTAL appropriations | Commitments | =1+1a +3a | 1.227 | 1.064 | 0.877 | 3.168 | ||
| Payments | =2+2a +3b | 1.227 | 1.064 | 0.877 | 3.168 |
Estimated total cost (EU and NCA) for activities to be conducted by EIOPA and ESMA
EUR million
| EIOPA and ESMA | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| Title 1: Staff expenditure | Commitments | (1) | 0.376 | 0.765 | 0.863 | 2.004 | ||
| Payments | (2) | 0.376 | 0.765 | 0.863 | 2.004 | |||
| Title 2: Infrastructure and operating expenditure | Commitments | (1a) | 0.097 | 0.196 | 0.216 | 0.509 | ||
| Payments | (2a) | 0.097 | 0.196 | 0.216 | 0.509 | |||
| Title 3: operational expenditure | Commitments | (3a) | 1.710 | 0.700 | 0.350 | 2.760 | ||
| Payments | (3b) | 1.710 | 0.700 | 0.350 | 2.760 | |||
| TOTAL appropriations | Commitments | =2+2a +3b | 2.183 | 1.661 | 1.429 | 5.273 | ||
| Payments | =2+2a +3b | 2.183 | 1.661 | 1.429 | 5.273 |
1
https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union/capital-markets-union-2020-action-plan_en
2
https://data.consilium.europa.eu/doc/document/ST-12898-2020-REV-1/en/pdf
3
https://www.europarl.europa.eu/doceo/document/TA-9-2020-0266_EN.html
4
Eurobarometer survey monitoring the level of financial literacy in the EU, 2023. The relevant question is Q12: “How confident are you that investment advice you receive from your bank/insurer/financial advisor is primarily in your best interest?”.
5
Eurobarometer survey on Retail Financial Services and Products, October 2022. Other influencing factors are the lack of financial means, concerns about the risks, uncertainty about the potential returns, lack of understanding/complexity and a preference to put money elsewhere
6
It is worth noting that also the founding Regulations of the European Supervisory Authorities contain a mandate to review and coordinate financial literacy and education initiatives by the competent authorities (article 9(1)(b) of the three founding Regulations.
7
In this context, ‘financial education’ indicates the formal or informal process through which individuals acquire financial literacy (the outcome).
8
Based on Eurostat’s sectoral national accounts (international data cooperation, NAID_10). If claims against insurers and pension entitlements were added, the numbers would change to 46% for the EU and 72% for the US (see Chapter 1.1 of the impact assessment).
9
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU
10
Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast)
11
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast)
12
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (recast)
13
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010
14
Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs)
15
Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product (PEPP)
16
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Action Plan on Building a Capital Markets
Union COM(2015) 468 final
17
Communication from the Commission on the mid-term review of the capital markets union action plan
({SWD(2017) 224 final} and {SWD(2017) 225 final} – 8 June 2017)
18
Communication from the Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions, A Capital Markets Union for people and businesses-new
action plan. COM/2020/590 final
19
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0591
20
Regulation (EU) 2022/2065 of the European Parliament and of the Council
of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act)
21
https://commission.europa.eu/system/files/2022-10/com_2022_548_3_en.pdf
22
See: https://reform-support.ec.europa.eu/what-we-do/financial-sector-and-access-finance_en
23
Ref Ares(2021)4803687- 27/07/2021 and Ref Ares(2021)4805409- 27/07/2021
24
Ref. ESMA35-42-1227
25
Ref. EIOPA-BoS-22/244
26
https://op.europa.eu/en/publication-detail/-/publication/d83364e5-ab55-11ed-b508-01aa75ed71a1/language-en/
27
The FSUG gathers experts representing the interests of consumers, retail investors or micro-enterprises notably to advise the Commission in the preparation and implementation of legislation or policy initiatives affecting the users of financial services. More information is available here: https://finance.ec.europa.eu/regulation-and-supervision/expert-groups-comitology-and-other-committees/financial-services-user-group-fsug_en.
28
Entities regulated by MiFID, Solvency II, IDD, UCITS or AIFMD producing their own investment products.
29
As part of their product oversight and governance measures, manufacturers would be required to identify and quantify the costs related to each investment product (both for existing and new products) and justify that it offers Value for Money to the target market, including when compared to other products on the market, based on product type-specific cost and performance benchmarks (‘manufacturer benchmarks’).
30
Entities regulated by MiFID, Solvency II, IDD, UCITS or AIFMD distributing to clients products which they manufacture or acting as an intermediaries and distributing products manufactured by other entities.
31
Similarly to manufacturer benchmarks, distributors of investment products would be required to assess how the products they distribute compare to relevant benchmarks (‘distributor benchmarks’) for similar products in the market.
32
See Chapters 6.3 and 7 of the impact assessment.
33
OJ C , , p. .
34
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (OJ L 302, 17.11.2009, p. 32).
35
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).
36
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).
37
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349).
38
Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (OJ L 26, 2.2.2016, p.19).
39
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p.48).
40
Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331 15.12.2010, p.84).
41
As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
42
Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-implementation/Pages/implementation-methods.aspx
43
Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
44
EFTA: European Free Trade Association.
45
Candidate countries and, where applicable, potential candidates from the Western Balkans.
46
Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).
47
Total Cost EU and NCA (including NCA share of employer’s pension contributions)
48
Total Cost EU and NCA (including NCA share of employer’s pension contributions)
49
AC = Contract Staff; AL = Local Staff; END = Seconded National Expert; INT = agency staff; JPD = Junior Professionals in Delegations.
50
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
51
Mainly for the EU Cohesion Policy Funds, the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime Fisheries and Aquaculture Fund (EMFAF).
52
See Articles 12 and 13 of Council Regulation (EU, Euratom) No 2093/2020 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027.
53
As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 20 % for collection costs.
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