Recommendations/guidelines from the European supervisory authorities (ESAs)
In order to help ensure proper and effective supervision throughout the EEA, the ESAs may issue recommendations addressed to national competent authorities (NCAs) or financial institutions. Such recommendations are not binding, but the NCAs are required to report to the ESAs whether they intend to comply with the recommendations.
If Finanstilsynet confirms that it will comply with a recommendation, information about this is made available on finanstilsynet.no. Recommendations addressed to financial institutions are expected to be observed on a par with other guidelines/circulars. Approved recommendations can also be found on the ESAs’ websites:
Competence to make binding decisions aimed at NCAs or financial institutions
EBA, ESMA and EIOPA have, in very special cases, the authority to make binding decisions aimed at NCAs. This applies, for example, if actions taken by the NCA imply that financial stability is threatened or EU rules are violated. Decisions can also be made to resolve a dispute between two or more NCAs.
If the NCAs fail to comply with orders from EBA, ESMA and EIOPA, decisions may be directly addressed to financial institutions in the EU.
Although Finanstilsynet is a member of the ESAs, Norway, as an EEA EFTA state, is not bound by decisions made by EBA, ESMA and EIOPA. The EEA Agreement stipulates that in such cases the EFTA Surveillance Authority is authorised to make decisions addressed to Finanstilsynet, and also to Norwegian financial institutions if Finanstilsynet does not take the necessary measures.
The competence of the EFTA Surveillance Authority to make such binding decisions is regulated in the EEA Agreement, and the solution is described in Proposition to the Storting 100 (2015-2016). You can also read more about Norway's affiliation with the EU's financial supervision system on the Norwegian government’s website.
What are Q&As?
Market participants and other players may submit questions to the ESAs on how legislation is to be understood. Questions and answers from the ESAs, so-called Q&As, are regularly published on their respective websites. Information on how to submit such questions can also be found on the websites.
What is a supervisory college?
A number of financial sector entities operate in more than one EEA country. In order to ensure good and coordinated supervision of such entities, NCAs participate in so-called supervisory colleges to assess the entities’ overall risks and capital requirements. There is one supervisory college per entity/group over a certain size and with a certain volume of cross-border activity. The ESAs participate and have a coordinating role in the supervisory colleges.
The framework for supervisory colleges is described in regulations for EBA, ESMA and EIOPA. More specific provisions on roles and responsibilities are given in regulations governing various sectors.
Finanstilsynet participates in a number of supervisory colleges and heads the supervisory colleges for, among others, DNB, Storebrand and Gjensidige.
What are peer reviews?
Peer reviews are organised by the ESAs, aiming to harmonise and improve supervisory practices in Europe. Why and how peer reviews should be conducted are regulated in the regulations establishing EBA, ESMA and EIOPA, Article 30. The article is identical for the three ESAs and can e.g. be found in the EIOPA regulations.
EBA, ESMA and EIOPA have established more detailed procedures for how peer reviews should be conducted. Typical of all three is that
- a panel assists the Board of Supervisors in proposing topics, the timeframe for and organisation of peer reviews.
- the review usually covers a limited area, e.g. compliance with a recommendation issued by the relevant ESA.
- the review often encompasses all 31 EEA countries. Each country completes a written self-assessment of its practices in the relevant area, the self-assessments are challenged by a team of reviewers, and a report is prepared which may include recommendations to adjust practices or the identification of best practices. The reports are approved by the Boards of Supervisors and published on the websites of EBA, ESMA and EIOPA, respectively.
ESMA's direct supervision of credit rating agencies and trade repositories
EMSA is the only ESA that has direct supervisory powers, which are restricted to supervision of credit rating agencies and trade repositories. No credit rating agencies or trade repositories are registered in Norway.